Translation: Original published in Finnish on 10/28/2026 at 11:30 pm EET.

Sanoma's Learning profitability increased significantly year-on-year in Q3, reflecting the company's efforts to boost efficiency and the market's growth turnaround. After fine-tuning of our estimates and a slight increase in the required return, we are adjusting our target price to EUR 11.0 (was EUR 11.5). In our view, the stock's reaction to yesterday's miss on Q3 estimates, which was primarily due to timing factors, was excessive. Thus, in light of Sanoma's low risk profile and the stock's moderate valuation, the stock's risk/reward ratio remains very attractive. We reiterate a Buy recommendation on the stock. The Q3 interview with the company’s CEO can be viewed here.

Expected level adjustment in Learning's profitability

Sanoma's revenue in Q3 developed stably, which was slightly sluggish compared to our expectations. This was due to Learning, where certain timing factors shifted revenue to Q4. Overall, however, the Learning business has remained on a good growth trajectory when factoring in the impact of terminated and poorly profitable distribution agreements on revenue. Despite stable top-line development, the group's adjusted EBIT increased by 10% year-on-year. This was driven primarily by the Learning segment, where the efficiency measures implemented in previous years boosted its profitability roughly in line with expectations, now that demand for learning materials has increased. Q3 earnings were slightly below our estimate, particularly due to timing factors related to Learning's revenue. We commented on the earnings in more detail on Wednesday, which can be read here.

Earnings guidance was revised as expected

Sanoma updated its guidance for the current year. The company now expects revenue of 1.30-1.32 BEUR (was 1.29-1.34 BEUR) and adjusted EBIT of 215-225 MEUR (was 205-225 MEUR). The underlying assumptions of this guidance are growth in learning content and a stable advertising market, both of which appear certain at this point in the year. The updated guidance in conjunction with the Q3 result confirms that the company's earnings growth is broadly on track with our expectations.

Only small forecast adjustments

We expect Sanoma to achieve a clear earnings improvement in Q4 as well, as Learning's shifted revenue is realized and Media Finland continues to improve gradually. Following the fine-tuning of our forecasts, our 2026 adjusted EBIT estimate settled at 219 MEUR (previously 220 MEUR), which is practically at the midpoint of the updated guidance range. Our estimates for the next few years remain largely unchanged as well. In our estimates, Sanoma's earnings will remain on an upward trend also next year, as demand for learning materials continues to grow, driven by curriculum reforms, and the earnings of the Media Finland business will receive a boost from the surge in advertising growth driven by elections and the opening of the betting market.

Risk/reward is attractive

With last 12-month earnings, Sanoma’s share is valued at a P/E ratio of 13x (adj.) and the corresponding adjusted EV/EBITA ratio is 10x. We believe these valuation multiples are relatively neutral for Sanoma, so the expected return for the next few years consists of our estimated earnings growth (2026-2028e EPS CAGR of 14%) and a dividend yield of around 5% Thus, the expected return rises to a very attractive level, considering Sanoma's moderate risk profile. Our cash flow model, which is at around our target price level, also indicates that the share is attractively valued.