Translation: Original published in Finnish on 10/26/2026 at 7:25 am EET.

Scanfil's Q3 figures, published on Friday, were operationally in line with our expectations, and we made virtually no changes to our earnings forecasts for the coming years. The company's outlook is positive in both the short and longer term, and the stock's valuation is also moderate (2027e: adj. EV/EBITA 11x). Therefore, the stock's expected annual return is attractive in our view. Thus, we reiterate our target price of EUR 14.00 and our Accumulate recommendation for Scanfil.

Direction and pace were in line with our expectations in Q3

Scanfil’s Q3 revenue grew by 32% to 252 MEUR, exceeding our estimate by 5%. Growth was driven by the ADCO and MB acquisitions (21 pp), while organic growth stood at 8.5%, the highest level since the COVID era. Currencies provided slight support to reported revenue. Scanfil's adjusted EBITA rose by 26% to 17.8 MEUR, which was practically in line with our estimate. Despite growth, profitability declined, which we attribute to a temporarily weak quarter in APAC and inflation (the impact on earnings was roughly neutral). Scanfil’s operating cash flow was significantly weaker than the result at 4 MEUR (-45% y/y) due to the commitment of working capital. At the end of Q3, the net debt/EBITDA ratio was 1.5x, which is solidly in the middle of the company's target range (1x–2x). Scanfil's balance sheet is in good shape overall. We commented on Scanfil’s Q3 numbers in more detail on Friday here. 

We made no significant estimate revisions

As expected, Scanfil reiterated its guidance for 2026 of 940-1,060 MEUR revenue and 64-78 MEUR adjusted EBITA. Based on the company's comments, the demand situation appears stably good despite geopolitical and economic uncertainties, although Q3 was, for a change, somewhat weaker in terms of sharply volatile new project wins (Q3: 48 MEUR, -33% y/y). The situation regarding components and raw materials also seems moderately under control, even though there is still some supply chain disruption. Scanfil's internal performance is steady and reliable, and we believe that APAC profitability will turn around by next year at the latest, once new product ramp-up in China and the Malaysian plant commissioning have progressed. 

We did not make any changes to Scanfil's short-term operational forecasts beyond a marginal fine-tuning following the report, but we slightly raised our financial cost forecasts due to increased working capital estimates (cf. Q3 developments and ongoing inflation). We forecast Scanfil's adjusted EPS to grow by around 15% by 2028, driven by the acquisitions made, momentum in the defense sector, a gradually recovering economic situation, and organic growth enabled by project wins. The main risks to our forecasts relate to external demand factors driven by the global economy, as well as the smooth functioning of the supply chain. However, we believe the risks associated with the latter factor are significantly smaller this time than in the aftermath of the COVID era.

We consider the valuation attractive

Based on our estimates for 2026 and 2027, Scanfil's adjusted P/E ratios are 16x and 13x, while the corresponding EV/EBITA ratios are 12x and 11x. Next year's multiples, which are gradually gaining prominence, are at the company's 5-year medians. Correspondingly, the 12-month expected return, consisting of earnings growth, a slight downside in multiples (Q3’26 LTM P/E 17x), and a dividend yield of just over 2%, exceeds our required return quite clearly. The share also has a moderate upside relative to our DCF value. Relatively, Scanfil is undervalued by approximately 10-20% compared to global contract manufacturers, but the company's valuation is quite in line with the mostly more moderately valued Nordic core peers. Therefore, we believe that additional purchases of this attractive long-term growth stock are well justified.