Translation: Original published in Finnish on 2/16/2026 at 8:00 am EET.

Exel's operational development in Q4 fell short of our expectations, while its order intake was at a record high. In its guidance, the company paved the way for rapid growth this year but expected growth to be more heavily weighted towards the second half of the year. The non-numerical guidance introduces uncertainty regarding the rate of growth, and we interpret the growth outlook for the beginning of the year as more moderate than our previous expectations. As a result, our current year estimates decreased, but we kept our estimates for the coming years almost unchanged. In our view, the stock is largely correctly priced for its current early-stage growth phase, which still contains uncertainties. Thus, we reiterate our Reduce recommendation and EUR 0.55 target price for the share.

Q4 figures improved but fell short of our expectations

Exel's Q4 revenue grew by 16%, still missing our forecast. We estimate that this was due to delivery schedules, a slower-than-expected ramp-up of the Indian factory, and the finalization of production transfers at the Belgian factory. The company’s EBIT also grew but clearly fell short of our expectations (adj. EBIT: 0.9 MEUR vs. forecast 2.4 MEUR). In our view, the margin level remained low considering the revenue growth. According to the company, this was influenced by the sales mix, measures related to the transfer of production from Belgium, and partly due to this, a higher-than-normal amount of subcontracting. Orders received in Q4 were a record high (78 MEUR vs. Q4'24: 29 MEUR), supported by the announced cable core agreements totaling 47 MEUR Reflecting this, the order book grew to 99 MEUR (+189% y/y), providing a good foundation for the transition to the growth phase of the strategy. However, we note that the structure of the order book has become clearly longer than historically. The company also announced plans for a reverse split during the spring.

Growth is expected to accelerate in H2’26

Exel issued guidance for the current year in connection with its report and expects its revenue (2025: 103 MEUR) and adjusted EBIT (2025: 3.2 MEUR) to increase significantly. According to the company, growth will be weighted towards H2. There is uncertainty regarding the underlying assumptions of the company's verbal guidance, but based on historical performance, we estimate that significant revenue growth indicates at least double-digit growth. In turn, we see more uncertainty associated with the assumptions of the earnings guidance, but historically, significant growth has been considered at least over 40% growth in EBIT (2019: +43%).

Based on the given guidance, we estimate that the growth outlook for the beginning of the year will be more subdued than our previous expectations. Against this backdrop, our current year estimates clearly decreased. We now expect the company's revenue to grow by 13% this year to 117 MEUR (was 129 MEUR) and adjusted EBIT to increase to 6.8 MEUR (was 8.9 MEUR). However, we kept our longer-term forecasts unchanged, as we estimate the company to progress with its measures by the end of the year in line with our previous expectations. In our view, the biggest uncertainties regarding revenue growth are related to the volumes at the Indian plant and the timing of conductor core orders.

We think the share is correctly priced

On our updated estimates, the stock's valuation for this year is, in our opinion, elevated (P/E 28x, EV/EBIT 12x) relative to our accepted valuation (P/E 10x-14x, EV/EBIT 8x-12x). With a significantly strengthened order book, we believe it is justified to look partly to 2027 for valuation. Looking at next year, the valuation is already cautiously attractive (P/E 11x, EV/EBIT 8x, EV/EBITDA 5x). However, forecast risks remain elevated, especially due to the ramp-up of volumes and profitability development at the Indian plant, as well as the timing of conductor core order deliveries. In our view, the stock's valuation is at a neutral level when considering the uncertainties. Our view of the stock being correctly priced is also supported by our DCF model, which is around the current share price level.