Translation: Original published in Finnish on 4/23/2026 at 10:30 pm EEST.

Nurminen Logistics’ Q1 report was well in line with our expectations. The company stated that its market outlook remains stable, and we do not believe there has been any significant change to it. Given the overall picture, the changes we made to our forecasts were minor. We currently view the stock's earnings-based valuation as moderately attractive, though the high cash flow yield strengthens the risk-adjusted expected return. Reflecting the minor changes to our estimates, we reiterate our Accumulate recommendation as well as our EUR 1.0 target price. 

Operating result in line with our expectations

Consistent with our expectations, Nurminen's revenue decreased significantly in Q1 due to strong comparison figures from the Baltic business and North Rail. However, the decline in revenue was slightly less severe than we expected for both the Railway business and the Baltics. The company's adjusted EBITA was 3.5 MEUR, in line with our estimate. The margin level still fell slightly short of our expectations due to the revenue beat and our estimated revenue structure for the Railway business (North Rail's share was lower than we estimated). The reported result was weighed down by non-recurring expenses of 0.7 MEUR, primarily related to the establishment of business operations in Italy, which we had not anticipated and which we consider normal business operating costs overall. Further down, net financial expenses and minority interests were lower than we expected, and reported earnings per share were in line with our forecast.

Minor estimate changes

In connection with the report, Nurminen unsurprisingly reiterated its H1’26 guidance, expecting its revenue (H1’25: 60.3 MEUR) and comparable EBIT (H1’25: 10.8 MEUR) to fall below the comparison period. The company stated that its outlook for the current year remains stable, supported by growth in its clientele and growth investments, such as in block train services between Italy and Sweden. The company noted that the route opened in February has performed in line with its commercial targets, but it has not yet had a significant impact on Q1 figures. The company had seen volume growth in most of its services since the beginning of March, though it noted that ongoing geopolitical conflicts and changes in tariff policy could rapidly affect demand in both directions. However, in our interpretation, there was no significant change in the company's outlook compared to that provided with the Q4 earnings report.

The report met our expectations, so our overall estimate changes remained minor. We made relatively small revisions to the revenue structure. These changes were reflected in slight increases in revenue estimates and slight decreases in margin estimates. Within the current year, we expect Q2 to develop broadly in line with the comparison period and H2 to show clear revenue and earnings growth due to lower comparison figures as well. We now expect the company's revenue to settle at 110 MEUR this year (was 107 MEUR) and operational EBIT at 16.4 MEUR (was 17.1 MEUR). Next year, we expect the company's earnings to increase to 17.5 MEUR (was 18.0 MEUR), supported by international growth.

We see upside in the valuation

With our estimates, the P/E ratios for Nurminen, adjusted for PPA amortizations, are just under 9x and 8x for 2026 and 2027. The earnings-based valuation is thus slightly below the multiple range we consider neutral for the current year (P/E 9x-12x) and even more so for next year. We expect that the company's free cash flow will also be stronger than its earnings due to the high and long depreciation periods of North Rail's locomotives. In our opinion, the moderately attractive earnings-based valuation of the share is therefore reinforced by a high cash flow yield, despite the minority interests. Our view of the share's upside and favorable cash flow profile is also supported by our conservative DCF calculation, which indicates a share value of around EUR 1.1, reflecting the company’s current earnings level.