Ahead of Elanders' Q2 2025 report, we lower adjusted EBITA by 2-5% for 2025E-27E, as we take a slightly more cautious view on our short-term estimates due to the prevailing geopolitical and tariff uncertainty. Although we look for negative adjusted EBITA growth of 19% y/y, primarily led by Fashion in the US and a weaker automotive market, Elanders is gradually facing easier comps with Q4 2025 the likely inflection point. We note several margin-enhancing initiatives in recent years, and see the likelihood of further fine-tuning, as the company has overcapacity in several regions. Once volumes return, we remain positive on the longer-term margin trajectory particularly related to Supply Chain Solutions (SCS) and pencil in a 130bp group margin uplift between 2025 and 2027. As such, we look for a 14% adjusted EBITA CAGR for 2025-27. We set a lower multiples-based fair value range of SEK 53-103 (56-113), implying 10-11x 2026E EV/EBITA. Marketing material commissioned by Elanders.
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