Translation: Original published in Finnish on 1/30/2026 at 8:00 am EET.

Megatrends are expected to support the development of Kalmar's target markets, and we estimate the company is well-positioned for these. We estimate the company will achieve clear earnings growth in the coming years through a gradual strengthening of the market. The share's valuation is at a reasonable level, but we believe the earnings growth we estimate makes the risk-adjusted expected return of this quality company sufficiently attractive. Thus, we reiterate our Accumulate recommendation and raise our target price to EUR 47 (was EUR 39), reflecting longer-term upward revisions to our estimates and adjustments to our accepted valuation. 

Leading market position in the industry

Kalmar is a technology company that supplies and services heavy material handling equipment. The company offers a wide range of products and services for the needs of several customer industries. Geographically, its main markets are Europe and the US. Of Kalmar's revenue, around two-thirds comes from the more fragile equipment business, while the rest comes from more stable services. Despite the softer market conditions in recent years, the company has maintained a good margin level and achieved a high return on capital (vs. reported ROCE-% Q3’25 LTM: 20.8%).

Market growth is supported by megatrends

The company's target markets are estimated to grow at an annual rate of 4-5% between 2024 and 2028, and various market indicators suggest moderate growth for this year.  Market growth is driven by megatrends such as the electrification of equipment and increased automation, as well as revisions in logistics chains. In our view, Kalmar is well-positioned for these trends in its offering, product development, and strategy (e.g. all-electric product offering, digital services, and autonomous and user-assisted solutions). In addition to product innovations, Kalmar’s strategic priorities include growing the services business and developing the company's performance (Driving Excellence program), which are also key to achieving the company's profitability targets (2028 adj. EBIT margin 15%, ROCE > 25%).

We expect Kalmar to achieve good earnings growth in the coming years (EPS CAGR Q3’25–2028 ~10%) through operating leverage from an improving demand situation, growth in the services business, and its performance programs. We estimate the margin development to be on an upward trajectory, even though we do not expect the company to fully reach its targets (2028e EBIT-%: 14.1%, ROCE-% 26.3%). Our estimates for the coming years are almost unchanged, but we have slightly raised our longer-term estimates. This is based on our assessment that prolonged economic uncertainty has partly delayed market growth. In addition, we estimate that the company will be able to maintain a higher margin level, supported by its strong market position and ongoing strategic measures.

We believe the valuation is still attractive enough

Based on our updated estimates, Kalmar's adjusted EV/EBIT ratio for 2026 is around 11x and the corresponding P/E ratio is around 15x. We believe the multiples are at a moderate level for a quality company like Kalmar, but at the same time, the acceptable valuation for the share is limited by demand volatility caused by the cyclicality of the equipment market. However, we have raised our acceptable valuation range to an EV/EBIT multiple of 11x–13x (was 11x–12x) and a P/E multiple of 14x–17x (was 13x–15x). In this context, the current pricing of the share is at a reasonable level. With the gradual improvement of the economic cycle and the earnings growth we estimate for the coming years, we expect the share's risk-adjusted expected return to continue to rise to a sufficient level for the next 12 months. Our positive investment view is also supported by our DCF model, which is at the level of our target price.