Translation: Original published in Finnish on 6/17/2026 at 3:15 am EEST.

We raise our target price for Scanfil to EUR 12.50 (was 11.50 €) on the heels of slightly increased long-term growth estimates. Scanfil has made good progress in recent years in executing its playbook, which relies on organic growth and acquisitions, and we expect this tactic to continue driving the company's profitable growth. Following the robust progress of the share price over the past year, the positive earnings growth projected in our forecasts has already been factored into the share. In our view, this narrows Scanfil's short-term expected return, even though the long-term story remains quite attractive.

Scanfil is a global electronics contract manufacturer

Scanfil offers its customers the opportunity to outsource the manufacture of products containing electronics and focus on their core operations, which creates flexibility in cost structures and improves capital efficiency for customers. Scanfil manufactures end products especially for the industrial, energy and environmental sectors (green transition), the healthcare segment, and the defense sector. In these customer segments, small production batches, short delivery times and long product cycles enable smaller companies to operate viably, even though competition in the industry is tight. The company has a total of 16 factories divided into the geographical areas of Central Europe, Northern Europe, APAC and the Americas. We believe that Scanfil's strengths include its comprehensive factory network, global operating model, cost-efficient culture, and extensive industry experience. The company also has a strong financial history, which reflects the viability of Scanfil's strategy over time. In our view, the clearest risks for Scanfil stem from the global economy and investment-driven demand.

Scanfil is a growth company, and the earnings growth outlook is currently good

We estimate that the relevant market volumes of Scanfil will grow faster than GDP in the long term. This growth is leveraged by the increasing outsourcing rate of industrial production, electrification, defense investments, and the relocation of certain supply chains closer to Western end-product markets. The company's market is fragmented, which gives Scanfil a good platform for inorganic growth. In the past nearly 2 years, the company has completed 3 acquisitions that expanded Scanfil’s customer base and geographic reach and established a foothold in the defense sector with strong medium-term prospects. Furthermore, despite generally sluggish market conditions in recent years, the company has managed to boost its sales, particularly among large customers, which has so far been reflected especially in strong sales figures for new projects.

We expect the company's revenue and EBIT to step up this year due to the MB and ADCO acquisitions and slight organic growth.  We estimate that revenue will grow at an annual rate of 5-8% in the coming years, driven by new projects and the positive development of underlying demand. We expect profitability (adj. /comp. EBITA %) to slowly improve with growth and rise towards the upper end of the 7-8% target range as growth scales slightly. In fact, according to our forecasts, the company's earnings are set to grow significantly by 2028.

Valuation has risen in the short term

Based on our estimates for 2026 and 2027, Scanfil's adjusted P/E ratios are 17x and 15x, while the corresponding EV/EBITA ratios are 13x and 12x. The current-year multiples, which are the main focus, are 20–30% above the company's own 5-year medians. Correspondingly, the expected annual return, consisting of earnings growth, downside in multiples (Q1’26 LTM P/E 19x), and a dividend yield of just over 2%, remains modest. Considering our DCF value, the share valuation is also somewhat tight. Scanfil is relatively undervalued by approximately 20–30% compared to global contract manufacturers and rather neutrally valued relative to Nordic peers. However, the global peer group is expensive by historical standards. Thus, we find the share's short-term valuation picture already quite challenging, even though the company has good long-term prospects, especially for growth-driven value creation.