In our view, the overall picture of Scanfil's Q1 report published yesterday was rather neutral, and we did not make any changes to our forecasts following the report. In our view, the stock is reasonably valued (2025e: P/E 13x, EV/EBIT 10x), but the expected return no longer exceeds the sustainable required return on a 12-month horizon due to elevated macro risks. Hence, we reiterate our target price of EUR 9.00 on Scanfil and lower our recommendation to Reduce (previously Accumulate) as the stock's upside narrows.

Scanfil's Q1 numbers were slightly below our estimates in a quarter dominated by the ramp-up of new projects. The company updated its earnings guidance indicator, but in practice the guidance remained unchanged, which was also in line with our expectations.

Scanfil has ramped up production of new projects won last year, probably in several factories, which is likely to have depressed the company's growth and profitability in the first part of the year. As a result, we expect Scanfil's Q1 numbers to weaken slightly from a satisfactory comparison period, although the numbers are also organically supported by the SRX acquisition completed at the beginning of Q4'24.

We expect Scanfil's playbook to remain viable, even though uncertainty related to investment-driven demand is now very high. In our view, the risk-adjusted expected return of the stock across all components is still slightly higher than the required return.