StrongPoint: Slow and steady - ABG

* Q3e EBITDA of NOK 9m* Awaiting stabilised markets* '26e-'27e estimates down - DCF NOK 15/shQ3e EBITDA of NOK 9mThe last couple of years have not been a period of smooth sailing for StrongPoint, as project delays and long decision-making cycles have hampered momentum and weighed on profitability. Adjusted EBITDA was NOK 12m in '24, down from NOK 80m in '22. It remains a waiting game, but performance has improved in '25, with H1'25 EBITDA of NOK 18m. StrongPoint is taking one step (quarter) at a time on its recovery road, and we expect Q3 to be another step in the right direction. We model Q3 revenues of ~NOK 358m (up ~14% y-o-y, vs. +18% y-o-y in Q2), with a GM at 42.0% and EBITDA of ~NOK 9m. This implies LTM EBITDA of ~NOK 32m, up ~70% from the Q1'25 LTM EBITDA – still a way to go, but getting there.Awaiting stabilised marketsThe EBITDA margin is still pressed at ~2.5%, which compares to the company's long-term target of an EBITDA margin >10%. Though we believe the long-term target will remain in place, we expect StrongPoint to provide a new strategy update in H1'26 regarding its short-term targets. Previously, StrongPoint targeted '25 revenues of NOK 1.5bn-1.8bn and an EBITDA margin of 4-6%. With these targets out of range, coupled with delays and difficult market conditions, it is likely that the company will adopt a more cautious view on its short-term targets, meaning a modest '26 target is likely. We model a '26e EBITDA margin of 4.0%, which yields EBITDA of ~NOK 62m – 25% below the previous '25 targets.'26e-'27e estimates down – DCF NOK 15/shWe make limited changes to our underlying '25e estimates (in absolute numbers), but our '26e-'27e estimates are down, as we lift opex somewhat and take a somewhat more careful view on the market recovery. Updated with more cautious estimates and a long-term EBITDA margin of ~7% (vs. >10% target), our DCF points to NOK 15/sh (we see fair range of 8-18/sh).