Translation: Original published in Finnish on 07/05/2026 at 08:51 am EEST

Anora's Q1 result fell short of our expectations, and we lowered our full-year adjusted EBITDA estimate to 71 MEUR, while the company reiterated its guidance of 74-79 MEUR. However, with the share price decline, we see the valuation of the share as cheap (e.g., 2026 P/E 9x, dividend yield 8%). We raise our recommendation to Accumulate (was Reduce) and lower our target price to EUR 3.6 (was 4.0).

Q1 earnings were clearly below expectations, but rose from the comparison period

Anora's Q1 revenue decreased by 4% to 136 MEUR, which was clearly below our estimate that anticipated slight growth. We expected the timing of Easter to support Q1 sales volumes, but structural headwinds weighed on the company's volumes more heavily than we assumed. The disappointing revenue was mainly due to a more than 10% decrease in the Wine segment, whereas we had expected it to be at the comparison period's level.

Anora's adjusted EBITDA settled at 8.8 MEUR, clearly falling short of our 11.4 MEUR expectation, but still exceeding the comparison period's 8.0 MEUR level. The revenue contraction caused by volume pressures explains the earnings miss, even though the company's operational efficiency measures supported profitability.

Guidance unchanged, our estimates fell below it

As expected, Anora reiterated its current year guidance, and the company still anticipates its adjusted EBITDA to be 74-79 MEUR. The company estimates that alcohol consumption will continue to be structurally challenging and that volume pressure will persist throughout the year, but its market outlook had not changed during the spring, e.g., due to the effects of the war in Iran.

Even before the Q1 result, our estimate was at the lower end of the guidance range. Solely due to the weaker-than-expected Q1 result, our full-year adjusted EBITDA estimate decreased to 71 MEUR, below the guidance and at the same level as last year. Although we believe the company's efficiency measures will kick in and support the result, declining volumes and cost inflation, especially in energy, logistics, and packaging costs, largely absorb these benefits in our estimates.

We also slightly cut our estimates for the coming years, but we still expect Anora to be able to improve its earnings in 2027-28. Our adjusted EBITDA forecast for 2028 is 78 MEUR, which is lower than Anora’s target of 85-90 MEUR.

Value creation still seems difficult

Although we believe Anora can improve its profitability, the company's return on capital remains roughly at the level of our required return in our forecasts. We estimate the company's investment needs to be small, and it continues to aim at freeing up working capital, which is only realized to a limited extent in our estimates. The growth outlook for the longer term is also subdued, as we do not believe there is any growth in the alcohol market in sight. In an environment of flat or decreasing volumes, the company must continuously improve its efficiency just to compensate for normal cost inflation. Therefore, after the earnings improvement in the coming years, we estimate earnings and cash flow to remain at the same levels in 2028-2034.

Earnings growth, as well as good cash flow and dividend yield support an attractive expected return

Anora's 2026 P/E 9x is at the below our acceptable multiples (10-12x). With earnings growth, as well as strong cash flow, and dividend yield in the coming years, we consider the overall expected return attractive. The dividend yield alone for the next few years reaches our required return level. Our DCF model indicates a value of EUR 3.8 per share, which also supports the stock's upside.