Translation: Original published in Finnish on 08/12/2026 at 09:20 pm EEST

We reiterate our EUR 8.5 target price and Accumulate recommendation for Taaleri. Q2 was weak in terms of numbers due to negative one-off returns, but the company continues to make strong strategic progress. Despite slightly decreased estimates, our view of the sum-of-the-parts has marginally increased. The stock is very cheap by all measures, but unlocking the undervaluation requires more evidence of successful capital recycling and a turnaround in the earnings trend.

Non-recurring items weighed on the result, Garantia shined

Taaleri's Q2 EBIT was 4.4 MEUR, clearly below our 5.7 MEUR estimate. The miss was almost entirely attributable to non-recurring items: In Renewable Energy, 1.7 MEUR of old performance fees from the SolarWind 1 fund were written down, and in the Investments segment, a 2.4 MEUR impairment was made on the Texas wind farm. Garantia acted as the Group's earnings engine and delivered one of the best quarterly results in its history: the insurance service result was strong as we expected, and investment income significantly exceeded our expectations, driven by a strong market. The guarantee insurance portfolio also grew faster than we expected, which supports earnings development in the coming quarters. Adjusted for investment income, the result was only slightly weaker than our estimates, meaning that operationally the quarter was in line with our expectations. In our opinion, however, the rapid progress of the strategy is more important than the quarterly figures: the 30 MEUR investment in Fintoil announced in July is a significant step in recycling the balance sheet, and the company reiterated both the preparation of fundraising for the SolarWind IV fund and its estimate of exiting old wind farms during 2026.

Small downward adjustments in the forecasts

Our main estimate change is that we no longer expect performance fees from the SolarWind 1 fund for 2026–2027, even though the fund still has realistic prerequisites to reach profit-sharing. The forecasts for Renewable Energy are also weighed down by higher-than-expected costs, and in other private equity funds, we have lowered our growth estimates due to the challenging real estate market. Our Garantia estimates, on the other hand, rose slightly with the rapid growth of the guarantee insurance portfolio. Estimate cuts are mainly explained by one-off revenues, as our earnings estimates based on continuing earnings have remained almost unchanged. Overall, we expect the company to generate around 30 MEUR in EBIT per year in the coming years, and the earnings mix should gradually improve. Earnings should also finally turn to growth in 2027. The biggest question mark in our estimates is the company's investment portfolio, changes in which are the single most important driver for the realization of the sum-of-parts value. Our dividend estimates are cautious, as the company emphasizes investments in its capital allocation.

There is enormous value in the parts, but drivers are missing

Our estimate for Taaler's sum-of-the-parts value has risen to around 310 MEUR (was 295 MEUR), or approximately EUR 11 per share. The increase is mainly explained by the investment portfolio, where we have switched to using fair value instead of book value The majority of the value is derived from Garantia, with the remainder practically divided between Renewable Energy and balance sheet investments. Historically, Taaleri has been priced at a 15-20% discount relative to the sum of its parts, but this discount has now widened to over 30%. The discount is huge, considering Garantia's record-high cash flows and the strong earnings level of Renewable Energy, which relies on continuing fees, and it reflects the market's distrust of the company's investment strategy The stock is cheap by virtually all possible measures. A key share price driver for the undervaluation to dissipate is the recycling of the balance sheet, where the Fintoil arrangement is the first concrete step. The company will release significant capital from its balance sheet over the next 18 months, which should help unlock value.