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Analysts and analyst reports
Summary
| OP | Inderes | Danske Bank | |
|---|---|---|---|
| Target price / fair value | 30.0 | 30.0 | 27.2 – 28.8 |
| Recommendation | Accumulate | Accumulate | |
| Updated | 15 July 2026 | 15 July 2026 | 14 July 2026 |
| Latest report | |||
| Analyst | Joona Harjama | Atte Jortikka | Miro Peltomäki |
OP’s analysis
Kreate has beat forecasts several times this year, and the outlook is still excellent thanks to the solid order backlog and tailwind from the infrastructure market in several areas. The upcoming quarters are seasonally strong, and in our view, it is very likely that the company will upgrade its guidance for a third time this year. We raise our target price to EUR 30.00 (prev. EUR 28.00) and reiterate our Accumulate recommendation.
Q2 results: Kreate’s revenue increased by more than 150% to EUR 185.4m and clearly exceeded forecasts (cons. EUR 155.3m). Growth was robust in both operating countries. The business in Finland was supported by the acquisition of SRV Infra and consolidation of KFS Finland’s figures, but organic performance was also solid as large projects under development moved on to the implementation phase, among other things. Robust growth was also reflected on profit lines, and EBITA increased clearly more than expected to EUR 9.3m (cons. EUR 5.5m). Kreate reached an EBITA margin of 5.0% in line with its targets in Q2 for the first time since Q3 2021. Order backlog reached a new high again at EUR 886m (+215% YoY), offering visibility for a reasonably long term.
Guidance seems conservative: Kreate reiterated its guidance according to which revenue will be in the range of EUR 600–650m and EBITA will be in the range of EUR 21–26m. Of the current order backlog, EUR 336m is expected to be realised during the rest of the year, which as such would bring revenue close to the mid-point of the guidance. If the company is able to advance projects as planned, similar to Q2, we believe that a third guidance upgrade is realistic. The cautious guidance is partly justified by timing issues related to large projects in H2.
Forecast revisions: We raise our EBITA forecasts for the next few years by 5–10%. The upward cycle in certain areas of the infrastructure market has started more quickly than we had expected and it is also structurally stronger than we had previously estimated. Consequently, we have raised our forecasts on volumes in the medium term.
Valuation: Our target price is based on the valuation multiples EV/EBITA 11x and P/E 13x on our forecasts for 2027 (80%) and the DCF model (20%).
Inderes’ reports
Kreate’s Q2 results continued where the strong Q1 left off, and the company’s profitability potential also began to emerge from beneath the strong top-line growth. Given the H1 performance, the current order book, and the still very positive outlook, our updated estimates are above the company’s guidance range for the current year. In addition, Kreate’s order book currently contains significant multi-year projects that will provide support for future years. With our updated estimates, the pricing still looks attractive, although the safety margin has narrowed significantly after the share price increase. We raise our target price to EUR 30.0 (was EUR 25.0). We maintain our Accumulate recommendation.
Earnings again ahead of our expectations
Kreate’s Q2 revenue grew by a whopping 152% year-on-year to 185 MEUR, clearly exceeding our 155 MEUR (+111%) estimate. In Sweden, revenue developed roughly in line with our expectations (Q2’26: 15.6 MEUR vs. 16.2 MEUR forecast), so the revenue beat came entirely from Finland. The growth was driven by themes already highlighted in connection with the June guidance upgrade, although the growth materialized stronger than we expected already in Q2.
Although revenue growth exceeded our expectations, in our opinion, the most positive aspect of the report was the clear improvement in profitability compared to the previous period, as strong growth was now more clearly channeled to the bottom line. Kreate’s Q2 EBITA was 9.3 MEUR, significantly exceeding our 5.4 MEUR estimate. Relative profitability (EBITA margin 5.0%) also clearly exceeded our 3.5% expectation. The only weakness in the report was the operating free cash flow, which declined clearly year-n-year (3.8 MEUR vs. 9.3 MEUR). However, the decrease is explained by the normalization of working capital from exceptionally strong levels at the turn of the year.
Strong H1, order book, and outlook challenge guidance
Kreate reiterated its earnings guidance, which it had raised in mid-June. Driven by a strong order intake during the quarter, the order book rose to a record high, as expected. However, the level at the end of the quarter exceeded our forecast, even though higher-than-anticipated revenue consumed the backlog faster than we expected. Kreate estimates that 336 MEUR of the order book will be realized during FY2026. When considering the H1 performance, revenue from the expected recognition of the current order book alone would bring it close to the midpoint of the guidance range (619 MEUR, guidance 600-650 MEUR).
In addition to the current order book, the market outlook also remains positive. Kreate estimates that the market situation in both Finland and Sweden is currently stronger than normal and expects the outlook to strengthen further. Our current year estimates increased significantly due to a stronger-than-expected Q2 result and moderate positive estimate revisions for the rest of the year. We now expect the company’s revenue to grow to 662 MEUR and EBITA to 28 MEUR. Thus, our estimates include a third guidance raise for the current year. We predict that the order book has reached a temporary absolute peak, although we expect the company to start next year with an even stronger order book than in the comparison period, which will support revenue development next year as well.
Earnings growth justifies the share price increase
With our updated estimates, Kreate is valued at 10x EV/EBIT and 12x P/E multiples for 2026-27. We still find the valuation attractive. In addition, Kreate’s share offers a dividend yield of ~4% for the coming years. The fair value derived from our DCF model (EUR 30.4) also supports our target price and continues to advocate a positive recommendation. However, due to a significant share price increase, we believe there is no longer a safety margin in this year’s multiples if earnings fall to or below the mid-point of the guidance range.
Danske Bank’s analysis
Kreate reported extremely strong figures for Q2. Sales and order backlog were at an all-time high, and the multiple large ongoing projects provide a credible path for higher volumes in the short and medium term. The company also showed evidence of strong profitability growth, with the EBITA margin reaching the 5% strategic target. We increase our fair value range to EUR27.2-28.8 (previously EUR22.2-23.8).
Sales and order backlog at all-time highs. Revenue growth was very strong at 152% y/y. Order backlog reached EUR885m, a y/y increase of over 200%. The market outlook remains very favourable, with industrial and datacentre investments bolstering the more modest growth outlook in the infrastructure market. The company has eight ongoing datacentre projects currently and, according to management, has capacity to increase this even further. The diverse customer base was evidenced by the private sector accounting for 46% of sales in H1.
Operational leverage showing. The company showed very strong margin development in Q2, reaching the strategic target of 5%, up an impressive 3.5pp q/q. This supports management’s comments that growth investments made earlier are now bearing fruit. According to management, the company is able to growth volumes without the need for major investment.
Estimate changes. We have raised our EBITA estimates for 2026-28 by 20%, 15% and 17%, respectively, to reflect a higher profitability level for the coming years.
Valuation. Kreate’s share is trading at 2026E EV/EBITA of 10.1x, a 10% discount to the peer group. Historically, Kreate has traded at a discount of 9% on average to the peer group. We make a significant uplift to our fair value range as the company has proven that growth investments are largely behind it and margin levels in line with its strategic target can be realised sooner than we expected.