Translation: Original published in Finnish on 5/8/2026 at 8:45 am EEST.

Enersense's Q1 operating result exceeded our estimates in the seasonally slowest quarter. The company made no changes to its earnings guidance for the current year but raised its growth target for the strategy period on the results day. We believe this strengthens confidence in the company's medium-term market outlook. As a result, we raised our revenue forecasts for the coming years, but they are still below the target level. We believe that the expected return from earnings growth in the coming years remains at a very attractive level. Reflecting this, we reiterate our Buy recommendation for the stock. On the back of estimate changes, we revise our target price back to EUR 5.2 (was EUR 5.0) and reiterate our Buy recommendation. 

Q1 earnings beat estimates

Enersense's adjusted EBITDA was 1.5 MEUR in Q1, exceeding our 0.9 MEUR estimate. The order book also continued to grow, reaching 413 MEUR at the end of Q1 (Q4'25: 392 MEUR). The development was supported especially by the Power segment's order book, which rose to a record level. The company had again made progress in its Value Uplift efficiency program and raised its overall target for the annual earnings improvement rate to 8.0 MEUR by the end of H1'26 (was 6.5 MEUR). 7.5 MEUR). A shadow over an otherwise positive report was cash flow, which was clearly in the red. This was mainly due to the payment of 12.5 MEUR in VAT liabilities, which, according to the company, was a one-off change in liabilities. However, we will continue to monitor the development of cash flow as the year progresses.

We raised our growth estimates coming years, led by Power

The company reiterated its guidance for the current year, estimating its adjusted EBITDA to be 19–23 MEUR. Enersense estimates that earnings and growth will improve especially in H2, reflecting project timings. However, it expects the market situation to remain good in all key market segments of its strategy. In our assessment, Power has the strongest demand situation among the business units, driven by the construction needs of energy

infrastructure. In connection with the results, the company also raised its growth target for the 2025–2028 strategy period. The company is now targeting average annual growth of 6-7% (was 4-5%). According to the company, the update reflects favorable market development and a significantly increased order book. We consider the raised target a positive sign that strengthens confidence in the company's ability to benefit from the energy transition and digitalization.

Reflecting the market commentary and updated growth target, we raised our growth forecasts for the coming years, driven by Power. Following the forecast upgrades, we expect revenue to reach the previous target level of 398 MEUR in 2028 (was 376 MEUR) and the EBITDA margin to rise to 6.6% (unchanged, target over 7%), close to the target level. We estimate that revenue growth, strategic measures, and Value Uplift will support earnings improvement. However, our adj. EBITDA forecast for the current year remained almost unchanged (21.0 MEUR vs. previous 20.6 MEUR).

Valuation has turned very low

With our estimates, the share's current year EV-based multiples (hybrid bond included as debt) are, in our opinion, moderate (2026e EV/EBIT 8x, EV/EBITDA 5x) and at the lower end of the levels we consider neutral (EV/EBIT 8x-12x, EV/EBITDA 5x-7x). Looking ahead to next year, the multiples fall to very low levels (2027e EV/EBIT 6x, EV/EBITDA 4x), and we see clear upside in the earnings-based valuation. We believe the valuation of the stock is weighed down, partly justifiably, by several recent non-recurring items related to restructuring and strategy, which have led to very volatile reported earnings development for the company. At the same time, in our opinion, this has partly overshadowed the measures taken on the operational side and the favorable underlying market outlook. As the earnings turnaround progresses roughly as we expect and cash flow strengthens, we see clear upside drivers for the valuation. Our view of the stock's significant upside is also supported by other methods (e.g. DCF EUR ~5.6/share).