Translation: Original published in Finnish on 06/21/2026 at 06:05 pm EEST

We revise our target price for Alexandria to EUR 13.5 (was EUR 13.0) and reiterate our Accumulate recommendation. The current valuation of the share can be justified by the current earnings, and investors get the potential success of asset management as an option. The company's strategy update is moving the company in the right direction, and progress in asset management should begin to materialize in the company's figures within the next 12 months.

Domestic investment service company

Alexandria is an asset manager focused on private clients, with a historical emphasis on product sales. The company's nationwide sales network is exceptionally extensive, and we consider local banks in particular to be its main competitors. Unlike for key peers, structured products play a significant role in the company's product offering, and their share of 2025 commissions was over 50%. As a result, the share of recurring revenue is clearly lower than for peers.

At the core of the company's strategy is the transition to becoming a comprehensive asset manager. At the heart of this is the company's new asset management service, in which the company has invested significantly in recent years. The company's absolute strength is its strong sales machinery, thanks to which the commission margins earned by the company are among the highest in the peer group. Historically, a key challenge has been the low customer-specific revenue, which clearly weakens scalability. This weakness is addressed by the company’s expansion in its asset management.

Earnings will make a level adjustment this year

We have not made any estimate changes since we clearly raised our estimates in connection with the positive earnings revision in early June. Alexandria's earnings will see a clear level change in 2026, driven by strong sales of structured products. We expect 2026 EBIT to increase by approximately 40% to a new record. 2027 is a gap year for earnings growth as the company digests the record comparison period for structured products. However, 2027 is a critical year for asset management, as it is when asset management should start to be properly reflected in the company's figures. In the long term, the company's earnings growth capability largely depends on its success in asset management, as the growth potential in structured products and insurance is more limited. We believe the company's strategy to expand into asset management is correct, and the preconditions for success are better than before. At the same time, however, we note that the transition from a product house to an asset manager is significant and requires organizational commitment. Profit distribution remains abundant, as is typical for the industry, and we expect the company to distribute all of its earnings as dividends in the coming years.

Asset management as a bonus

We examine Alexandria's valuation through a peer group, absolute valuation multiples and a cash flow model. Both the peer group and the DCF model indicate that the shares are slightly undervalued, and the absolute multiples also support this view. The share price could be warranted by the current earnings level alone, and potential success in asset management would significantly increase earnings growth potential from the current level. Success in asset management would also decrease the company's high required return, as the predictability of the business and its structural growth potential would improve. We therefore believe the stock continues to offer an attractive risk/reward ratio, relying on earnings growth and a dividend yield that is among the best in the sector.