Translation: Original published in Finnish on 2/10/2026 at 8:10 pm EET.

We reiterate our EUR 8.5 target price and Accumulate recommendation for Taaleri. The Q4 report was largely in line with operational expectations, and forecast changes have remained limited. The stock is very cheap by all measures, but short-term price drivers are scarce. The key driver for the share is the company's balance sheet movements, and we cautiously await increased activity in this area. 

Strategy progressing

Taaleri’s Q4 result was in line with our expectations. Garantia delivered another excellent result and returned to stronger-than-expected growth. The dividend was somewhat lower than market expectations, and the company clearly emphasizes own balance sheet investments in its capital allocation. In our view, the most important aspect of the Q4 report was the progress of the strategy. The company has achieved a clear change of pace since its strategy update, and the strategy has progressed commendably over the past six months. We comment on the Q4 result in more detail here. Today's share price reaction was surprisingly strong given the numbers, and we consider it possible that the market was spooked by the company's challenges at the Joensuu Biochar Plant. We would like to remind you that the direct impact of the project on Taaleri is marginal, but as a reference, the plant is, of course, important.

Limited revisions to forecasts

There have been no material changes to our operational earnings forecasts. Next year will be a good one for Taaleri in terms of earnings, as the company is expected to exit several major projects (Texas, Fintoil and old wind funds). In addition, cash flow in 2026 should be very high as performance-based receivables are realized with these exits. A major event in 2027 will be the first closing of the SolarWind4 fund, which should significantly increase recurring fee-based earnings and improve the earnings mix. Overall, we expect the company to generate just over 30 MEUR in EBIT per year in the coming years. However, it is currently difficult to see a clear upward trend in earnings, and this would require better visibility into the development of the investment portfolio. Our dividend forecasts are cautious, as we expect the company to prioritize investments.

With its strategy update, the company has clearly become more active on the investment front, and we expect it to make significant new balance sheet investments over the next 24 months. The company has significant leeway on its balance sheet for this, especially as receivables are realized during 2026. Modeling investments is difficult, and we have taken a conservative approach to this. However, it is clear that changes in the company's investment activities will be the most significant driver for the share in the short term.

The share is cheap but drivers are in short supply

Our conservative sum-of-the-parts calculation has remained unchanged at just over EUR 10 per share. The majority of the value is derived from the insurance company Garantia, with the remainder practically divided between Renewable Energy and balance sheet investments. Historically, Taaleri has been priced at a 15-20% discount relative to the sum of its parts, but this discount has now widened to over 30%. The discount is huge, considering Garantia's record-high cash flows and the significant realized earnings improvement in Renewable Energy, which is based on recurring fees. The steep discount to the sum-of-the-parts valuation reflects the market's distrust of the company's investment strategy.

Overall, we consider Taaleri's stock to be very inexpensive from virtually all possible angles, but the problem is the lack of share price drivers. We find it difficult to see the market correcting the undervaluation without concrete actions. The company's investment portfolio and its movements, both on the buy and sell side, will again play a key role here. A significant re-allocation of the balance sheet over the next 24 months could, in the best-case scenario, significantly unlock the stock's undervaluation, but we remain on standby until concrete steps are taken in this direction.