Translation: Original published in Finnish on 2/13/2026 at 8:00 am EET.

While Harvia's Q4 result fell short of our expectations, we believe that the company will continue on its path of strong profitable growth and clear value creation, and its growth prospects for the coming years are excellent. This, combined with the decline in valuation following the fall in the share price, makes the expected return attractive in our view. We revise our target price to EUR 44 (previously EUR 43) and raise our recommendation to Buy (previously Reduce).

Q4 results improved year-on-year, but missed our expectations

Harvia's comparison period was exceptionally strong in terms of revenue in Q4, with organic growth of over 30% in North America in Q4'24, supported by campaign deliveries. Nevertheless, this pushed profitability to an exceptionally low level relative to the company's standing. As expected, the strong comparison period in Q4'25 slowed down revenue growth, which was roughly in line with our forecasts at 5%. Harvia's material margin increased to 63% from just under 60% in the comparison period, aligning with the company's typical range (currently around 63-65% in our opinion). This was slightly weaker than our forecast of 63.5%. However, the company's fixed costs, particularly other operating expenses, were higher than expected, resulting in an adjusted operating profit of 10.5 MEUR, which was significantly lower than our forecast of 11.6 MEUR. Reported earnings per share fell short of our forecast by the same 10%. The adjusted EBIT margin for both Q4 and the full year fell slightly short of the company's 20% target. However, we still consider the company's investments in growth to be sensible and value-creating, so we are not particularly concerned about the margin falling below our expectations in Q4.

Only positives in the outlook

With revenue in Northern Europe having turned to growth, we believe Harvia's outlook for 2026 is positive across all its geographical regions. The US and APAC&MEA have been growth drivers for years and continue to show strong double-digit growth in our estimates, while the European segments are growing at around 5%. This leads to an annual growth rate of approximately 10% in our estimates, in line with the company's target. The CEO specifically mentioned that the outlook for the US is good for Q1, as there are still deliveries to be made during the new year from campaigns at the end of last year. However, this was also the case in the comparison period. He also mentioned that orders in Finland have been growing, which we believe supports continued growth in Northern Europe this year.

In terms of profitability, we believe that the outlook is stabilizing, as there will be no additional headwinds from tariffs this year compared to Q4. To our knowledge, the company has implemented price increases at the beginning of the year, at least in the US, to offset factors such as a weakening dollar and normal cost inflation. We expect the company to continue investing in long-term growth in the coming years. In our forecasts, this means that its fixed costs will grow at roughly the same rate as its revenue. Therefore, we estimate the adjusted EBIT margin for 2026 to be around 20%, in line with the company's target. We did not make any substantial changes to our earnings estimates in this report.

Valuation is attractive

Harvia's valuation has clearly decreased following the post-earnings share price decline. This year's multiples (EV/EBIT 16x, P/E 21x) appear favorable rather than expensive for the first time in a long while, considering the company's quality and growth profile. We consider the company's return on capital and cash flow generation capabilities excellent, and multiples will moderate further in the coming years. We believe that Harvia’s capital allocation will continue to be value-creating, and thus channeling cash either to acquisitions and/or larger dividends would support the investor's expected return. The company already hinted at the possibility of acquisitions in the near future. We also see Harvia as a viable acquisition target.