Translation: Original published in Finnish on 07/05/2026 at 09:00 pm EEST

Sanoma's Q1 performance was largely as expected, although Media Finland's improved margin was a positive surprise. We made no major changes to our estimates, but we included a recent small acquisition in them. We expect significant earnings growth from Sanoma this year due to market growth in the Learning business, and the medium-term earnings growth outlook is also good. Relative to this outlook, the valuation of the share is low, which is why we reiterate our Buy recommendation and EUR 11.5 target price. The Q1 interview with Sanoma’s CEO can be viewed here.

Media Finland's good profitability reduced Q1 losses

Sanoma's Q1 revenue settling at the comparison period level of 221 MEUR was in line with our expectations. At the segment level, there was a slight difference in our estimates compared to our expectations, as Learning achieved growth, especially due to the good development of its Dutch operations. Media Finland's development was hampered more than we expected by the weak performance of the advertising market, and subscription revenue growth was also slightly more subdued than anticipated. The adjusted operating loss decreased slightly year-on-year, as Media Finland improved its profitability thanks to efficiency measures. Learning's earnings also showed a slightly upward trajectory, supported by the Solar efficiency program and top-line growth. We commented on the Q1 earnings in more detail on Thursday, which can be read here.

The earnings growth outlook is quite good

Sanoma reiterated its guidance for the current year, which indicates revenue of 1.29-1.34 BEUR and adjusted EBIT of 205-225 MEUR. The underlying assumptions of growing demand for learning materials and a relatively stable advertising market were also expected. The reiteration of the guidance was expected, but our 2026 estimate is at the upper end of the guidance range, and we would like to remind you of Sanoma's historically conservative guidance. However, a significant uncertainty is the weak advertising market, while we are confident about the learning business's margin improvement.

Small boost to our estimates from the acquisition

Our forecasts for the current and coming years remained largely unchanged, with the exception of the Q1 earnings beat and a small acquisition in the learning business. We predict that Sanoma's revenue will grow slightly to 1.32 BEUR this year, while expecting clear growth in the group's result driven by Learning's growth in content sales. Our adjusted EBIT estimate for 2026 rose to 218 MEUR, right at the upper end of the guidance. We predict that the company's results will continue to grow in the coming years, as Learning's revenue is supported by growth in the learning materials market and Media Finland grows, driven by the positive development of the advertising market and subscription income. Thus, we estimate the adjusted EBIT for the coming years to grow by an average of 7% by 2028, in line with the company's target. The still relatively recent extensive report on Sanoma can be found here.

Expected return is very attractive

With last 12 month earnings, the share is valued at a P/E ratio of 15x (adj.) and the adjusted EV/EBITA ratio is 11x. We find these valuation multiples to be relatively neutral for Sanoma, so the expected return for the next few years will consist of our estimated earnings growth (2026-2028 CAGR 16%) and a dividend yield of around 5%, rising to a very attractive level considering Sanoma's moderate risk profile. Our DCF model, which is slightly above our target price, also suggests a very attractive valuation for the stock.