Translation: Original published in Finnish on 11/6/2026 at 8:30 am EET.

In our view, Enersense’s Q3 report was on the soft side overall, given the operating margin, the order book trend, and cash flow. Timing factors partly explain these, but the unchanged full-year guidance still requires a rather strong finish to the year. This creates timing-related risks to the guidance, and the company also still has much to prove on its profitability recovery. Following the sharp share price reaction, we still see the share’s risk-adjusted expected return rising to an attractive level over a 12-month horizon, driven by the earnings growth we forecast. We reiterate our Accumulate recommendation but lower our target price to EUR 5.2 (prev. EUR 6.2), reflecting estimate cuts and a higher required return.

Still more to prove

Enersense’s Q3 adjusted EBITDA was 5.5 MEUR, short of our 6.0 MEUR forecast despite a revenue beat. Relative to our forecasts, earnings were weighed down by Connectivity’s weaker revenue mix and the slow ramp-up of Energy Transition’s large  Aquatech project. Power’s earnings slightly beat our forecast, but its margin was still pressured by the slowdown in the Estonian market. The company reiterated that the program’s benefits will materialize gradually through 2027. The company reiterated that the program’s benefits will materialize gradually through 2027. On the negative side, the order book declined, and cash flow was slightly negative due to project schedules. The order book is, however, inherently affected by the timing of larger projects. On the sales side, it was positive that the company said its tender pipeline is growing in both size and quality.

Estimates lowered following the report

As expected, the company reiterated its full-year guidance for adjusted EBITDA of 19–23 MEUR. Enersense expects several projects to accelerate in Q4 and therefore anticipates a strong end to the year. This is also critical for meeting the guidance (Q3'26 YTD adj. EBITDA: 10.1 MEUR). The Q4 weighting came as no surprise, but it keeps the timing-related risks to the guidance, such as weather and project schedules, high. At this stage, we consider it most likely that this year’s earnings will land around the lower end of the guidance range, with the final outcome also depending on external factors. Our full-year adjusted EBITDA forecast is now at the bottom of the range, at 19.0 MEUR (prev. 20.0 MEUR). Even if a potential guidance cut were driven solely by timing shifts, we would still consider it at least a mild disappointment for the turnaround story. We expect earnings growth to continue next year, driven by a favorable market environment and larger efficiency gains (adj. EBITDA 2027e: 22.7 MEUR).

Expected return relies on earnings growth materializing

In our view, this year’s EV-based multiples are slightly elevated (2026e EV/EBIT 11x, EV/EBITDA 6x) following a report that somewhat increased uncertainty. At this point in the year, however, we are already looking ahead to next year, when the multiples (2027e EV/EBIT 8x, EV/EBITDA 5x) fall to the lower end of our acceptable ranges (EV/EBIT 8x–12x, EV/EBITDA 5x–7x). In our view, a neutral valuation for the share currently sits between the lower end and the midpoint of these ranges. We therefore estimate that the expected return driven by earnings growth remains attractive over the next 12 months, despite the risk of a profit warning. We also see upside in the valuation as the earnings track record builds. Other methods also support our positive view, despite lower estimates and a higher required return (DCF ~EUR 5.7 per share).