Translation: Original published in Finnish on 8/17/2026 at 8:30 am EEST.

Exel's Q2 figures exceeded our estimates by a comfortable margin. The implementation of the company's growth phase strategy has progressed faster than expected, and actions taken in recent years are bearing fruit. If our strong earnings growth forecast materializes, the share's valuation is not unreasonable, but after the recent sharp share price increase, the bar has also risen significantly. With the development that has increased our confidence, we are ready to lean more heavily on the potential of the coming years. We estimate the share's risk-adjusted return potential to still be sufficient and reiterate our Accumulate recommendation, but raise our target price to EUR 15.0 (was EUR 10.5). 

Q2 figures wiped the floor with expectations

The company's Q2 revenue grew by a substantial 40% to 34.6 MEUR, significantly exceeding our estimate ( 29.5 MEUR). The development and beat were partly supported by customers' accelerated delivery requests related to conductor core orders, which, according to the company's comments, had an impact of ~4 MEUR. Exel's adjusted EBIT more than doubled to 2.5 MEUR, also clearly exceeding our forecast ( 1.4 MEUR). Despite timing-related tailwinds, the development strengthened our confidence in the effectiveness of the strategic measures taken (e.g. reorganization and optimization of the factory network) as volume growth materialized. The company's order intake (34.5 MEUR, +22% y/y) also continued its positive trend, although demand was somewhat supported by customers increasing their inventory levels due to the unstable geopolitical situation in the spring. Overall, the order book remained very strong (99 MEUR, +111% y/y), which provides good support for the future, along with a generally favorable market situation.

We raised our longer-term estimates

The company reiterated its guidance for the current year and expects its revenue (2025: 103 MEUR) and adjusted EBIT (2025: 3.2 MEUR) to increase significantly. However, the company removed expectations of growth being more heavily weighted toward H2, in line with earlier deliveries. Reflecting this, we did not make significant changes to our H2 estimates and expect the development for the rest of the year to be largely similar to H1. Following the Q2 beat, we now forecast the company's revenue to reach 130 MEUR this year (was 125 MEUR) and adjusted EBIT to be 8.2 MEUR (was 7.7 MEUR). We did not make significant changes to our growth forecasts for next year, reflecting a positive but in general largely unchanged outlook. However, we expect strong growth to continue next year (2027e revenue: 153 MEUR) due to continued commercial volume growth at the Indian plant, among other factors. Following the report, which strengthened confidence in the strategy's execution, we raised our longer-term forecasts for both revenue and profitability. Our 2028 forecasts (2028e revenue: 171 MEUR, adj. EBIT %: 8.5%) are still below the company's ambitious target levels (2028 revenue 200 MEUR, adj. EBIT % > 10%).

Expected return sufficient, but required return has increased

We believe the stock's valuation for this year is high based on EV multiples (EV/EBIT 15x, EV/EBITDA 9x), despite significantly growing earnings. With developments that have increased confidence (including a decrease in the required rate of return), a strong order book, and a favorable market situation, we believe it is justified to look more strongly to next year for valuation. Based on our estimates, the valuation would become cautiously attractive next year (EV/EBIT 9x) compared to what we currently consider a neutral level (EV/EBIT 10x-12x). This, however, requires the materialization of our significant forecast earnings growth. However, with the strategy implementation progressing in line with the company's targets, we are ready to lean on the potential of the coming years. Our positive view is also supported by our DCF model, which is at the level of our target price.