* Q3 volumes ahead of expectations
* '26e EBIT up by 11% on higher volumes
* We see a return to growth as demand recovers
Q3 volumes ahead of our estimates
Last week, SinterCast pre-announced Q3 volume data ahead of the report on 4 November. Series production amounted to an annualised 3.25m engine equivalents (ABGSCe 3.20m), +19% y-o-y. September reached an annualised 3.8m EEs, the highest monthly production level in 25 months. Sampling Cup shipments rose 80% y-o-y, to approximately 68,000. Following the update, we estimate Q3 sales of SEK 34m, +46% y-o-y (o/w +44.5% organic and +1.7% FX) against undemanding comps in Q3'25, when sales fell 28% y-o-y. We forecast EBIT of SEK 13m and an EBIT margin of 37.6% (23.8%). We are particularly encouraged by the rise in sampling cup shipments. Cup sales are tied directly to CGI production volumes, so the increase signals higher foundry activity and should support recurring revenue.
Pre-announced volumes raise '26e EBIT 11%
In addition to incorporating the pre-announced Q3 volumes into our estimates, we partly extrapolate the strong momentum seen in September into Q4. We raise annualised EEs for the quarter to 3.5m from 3.3m and sampling cup shipments to 54,000 from 49,000. As a result, '26e sales is increased by 8% and '26e EBIT by 11%; '27e and '28e EBIT come up 5% and 9%, respectively. Updated FX rates also have a material impact on our estimates, contributing approximately +5% to '27e-'28e EBIT.
Trading at 23x/13x '26e/'28e P/E
The Q3 volume update marks the return to y-o-y growth sales growth for the first time since Q2'24 and earnings growth since Q1'25, which the CEO attributes to the ramp-up of existing programmes and a growing order book among the major CV OEMs as market demand recovers. The share is currently trading at 23x/13x '26e/'28e P/E vs. its historical median of 22x/14x and a '27e FCF yield of 7%. The Q3 report is due at 08:00 CET on 4 November.