Translation: Original published in Finnish on 5/13/2026 at 9:00 pm EEST.

Relais' Q1 figures surpassed our estimates by a wide margin, as organic growth was stronger than anticipated. However, since we only made slight changes to our estimates, we reiterate our EUR 18.0 target price and Buy recommendation for cheaply valued Relais. The Q1 interview with Relais’ CEO can be viewed here.

Organic revenue development was buoyant

Relais' revenue grew by as much as 44% in Q1 year-on-year to 119 MEUR. While acquisitions were the driving force behind the revenue increase, organic growth at the group level reached 7%, largely accounting for the beat of our estimate. We estimate that organic growth was fastest in Technical Wholesale, driven by stronger demand due to the relatively harsh winter. On the other hand, according to the company, organic growth was very broad-based across different subsidiaries, indicating that the company's growth initiatives strengthened growth as well. The operating result, adjusted for one-time items and amortization of acquisitions (adj. EBITA) reached 12.8 MEUR, thus exceeding our forecast, driven by revenue growth. Profitability was in line with our estimate, decreasing slightly from the comparison period partly due to changes in sales distribution. There were no surprises in segment-specific profitability, as the profitability of Commercial Vehicle Services improved, Technical Wholesale developed relatively steadily, and the Products and Solutions segment's profitability decreased from an unusually high comparison period level.

Updated strategy and targets to be published next week

Relais will host a Capital Markets Day on Wednesday (May 20), during which it will announce its new strategy and financial targets. We believe the company will continue to focus on allocating capital to the Nordic vehicle aftermarket, an area in which it has a strong track record. We expect the targets to highlight the new CEO’s emphasis on efficiency in terms of both capital turnover as well as profitability and cash flow. Therefore, we believe the company will incorporate indicators related to these areas, such as return on invested capital, into its financial targets. We think these priorities are appropriate and believe that the company is well-positioned to improve its efficiency, thereby accelerating value creation, which is already at a good level.

Modest positive forecast changes

We have made minor changes to our estimates, though we believe that conditions have aided organic growth to some extent, which we do not rely on in our future forecasts. Our operating earnings forecasts for the next few years rose by about 2%. While growth this year is being driven by acquisitions, we expect revenue growth of 2–3% in the coming years, which is in line with the market pace, as well as a steady trend in profitability. Consequently, our forecasts do not depend on achieving the targeted efficiency gains, and we will wait for concrete evidence of these measures before incorporating them into our forecasts. However, in line with the company’s strategy, earnings growth in the coming years will most likely be bolstered by acquisitions.

The stock is cheaply priced

Based on our forecasts, the adjusted P/E and EV/EBITA ratios for 2026–2027 are 11–10x and 10–9x. We believe these are moderate and offer upside potential, considering Relais' operational businesses and track record in capital allocation. Relais is valued at a discount to companies engaged in similar businesses, whereas compared to serial acquirers, the valuation is at a significant discount. In our opinion, the justified valuation is found in the middle ground of these two peer groups. Thus, when viewed through peer valuation, the share is cheap, a view supported by our cash flow model at the level of our target price.