Translation: Original published in Finnish on 11/5/2026 at 8:00 am EET.

Exel's Q3 figures were clearly better than we expected. However, the company itself described the quarter as exceptionally strong, which leads us to believe that timing-related factors, for example, also played a role in driving this growth. Nevertheless, these developments further reinforced our confidence in the company’s strategic positioning and growth strategy implementation. We believe that the expected return of the share, driven by earnings growth in the coming years, remains attractive. Reflecting this, we reiterate our Accumulate recommendation for the share but raise our target price to EUR 19.0 (was EUR 18.00), in line with the positive forecast changes.

Q3 figures blew our forecasts out of the water

Exel's Q3 revenue grew by a substantial 59% to 38.2 MEUR, significantly exceeding our estimate (32.4 MEUR). The company described the quarter as exceptionally strong, and, in light of this, we estimate that the development was further aided by tailwinds from the timing of delivery requests (e.g., conductor core orders), in addition to strong execution. In terms of customer industries, revenue more than doubled in both the Energy segment and the Other segment, with the latter’s growth driven by the defense industry. This strong progress was also reflected in the operating profit, which rose to 3.4 MEUR, also exceeding our forecast of 2.2 MEUR by a clear margin. We estimate that the earnings beat was driven particularly by the operational leverage provided by revenue growth, and the company commented that the sales mix was favorable. Exel's order intake (38.2 MEUR, +42% y/y) also remained extremely strong, and the company’s order book held steady near the previous quarter's level (98 MEUR, +99% y/y). We thus see the order book, the largely favorable market environment, and the Suzlon contract as providing strong support for next year.

We raised our near-term estimates in particular

As we expected, the company reiterated its full-year guidance and anticipates that its revenue (2025: 103 MEUR) and adjusted EBIT (2025: 3.2 MEUR) will increase significantly from last year. However, the company noted that it expects growth to moderate in Q4, following two exceptionally strong quarters. The market situation, on the other hand, appeared to have remained generally favorable and, as we interpret it, was strongest in Energy and applications related to the defense industry, which came as no surprise.

Based on actual developments and feedback, we have slightly lowered our forecasts for the rest of the year as we believe timing-related factors contributed to developments in previous quarters. Nevertheless, we increased our full-year 2026 estimates, expecting the company's revenue to grow 34% to 139 MEUR (was 134 MEUR) and its adjusted EBIT to amount to 10.0 MEUR (was 8.5 MEUR). Based on the report, we also raised our forecasts for the coming years (2027e–28e adj. EBIT +7–10%), and we expect the company's earnings growth to remain very rapid in the coming years. Despite the upward revisions, we do not yet expect the company to quite reach its financial target levels (2028 revenue 200 MEUR, adj. EBIT > 10%). In our view, however, recent developments and the new Suzlon agreement have bolstered the credibility of these targets (cf. 2028e revenue 190 MEUR, adj. EBIT-%: 9.0%).

Earnings growth maintains attractive expected return

In our view, the stock's valuation is high for this year based on EV multiples (EV/EBIT 14x) despite significant earnings growth. At this point in the year, however, we believe it is justified to already start looking ahead to next year. With our robust earnings growth forecasts, the EV/EBIT multiple for 2027 (9x) thus drops below the range we currently consider justified (EV/EBIT 10x–12x). Consequently, we continue to view the expected return, consisting of earnings growth, as attractive. Our positive view is also supported by our DCF model, which is roughly in line with our target price.