We make limited revisions to our 2026-27 estimates, lowering adjusted EBIT by ~1%. Our near-term estimates are challenged by what we see as largely temporary negative mix effects in the US, however, hence we lower the 2025E adjusted EBIT margin by -70bp, prompting an 18% cut to 2025E adjusted EBIT. The share traded down 6.5% following the report, owing in part to significant FX-related losses resulting in adjusted EPS of SEK -10.3. Going forward, we expect the adjusted EBIT margin to expand by 140bp y/y in 2026, to 4.5%, largely driven by improved cost absorption in the German operations. This should support ~50% y/y earnings growth. Even with this expected recovery, however, the share trades at ~12x adjusted EV/EBIT, a ~20% premium to the peer group, which is on the upper end of our fair value range of 8-12x adjusted EV/EBIT. Marketing material commissioned by Ferronordic.
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