@christoffer.jennel has provided his preliminary comments as Eltel publishes its Q3 results on Thursday.
We expect public infrastructure projects in Sweden to continue their good development and the Finnish Power segment to grow steadily. Combined with the absence of negative impacts from the divested Polish business and currency tailwinds, we expect these factors to support strong revenue growth in Q3. Alongside continuous strategy execution and focus on profitability, we forecast another year-on-year improvement in EBITA profitability. As always, managementâs comments on market outlook and strategy execution will be key areas of interest in the report.
Christoffer Jennel has published a new company report following Q3. Although Eltelâs Q3 revenue fell below our forecast, profitability was well in line with our expectations. We consider Q3 profitability, despite lower revenue, a sign of higher resilience and further evidence that Eltelâs operational and commercial efficiency measures are yielding results. The continued strong development of new business areas (24% of Q3 contract value) also supports, in our opinion, future profitability improvement. In a turnaround company like Eltel, profitability development remains central to our investment case, as it is the most important driver of sustainable value creation. In our view, the company has taken clear and consistent steps in the right direction and is now better positioned to maintain and continue improving its profitability. In light of the Q3 report, however, we have revised our revenue forecasts downwards, but have largely kept margins unchanged. Following the post-earnings share price decline, we believe the current valuation offers good risk-adjusted return potential over the next 12 months. We therefore reiterate our Add recommendation and raise our target price to SEK 9.9 (previously SEK 9.7).
Hello everyone! Jesper from the Swedish community here. Today, we recorded an interview with analyst @christoffer.jennel about our updated analysis on Eltel after the Q3 report. So feel free to check it out, though itâs in Swedish. If you have any questions youâd like Christoffer to answer, feel free to write them here!
Here are Christofferâs preview comments as Eltel reports its Q4 results on Friday, Feb 13.
We expect the report to highlight continued margin resilience despite a varying demand environment across different geographical areas. While traditional telecommunications markets remain weak, especially in Norway and Finlandâs Fiber-to-the-Home (FTTH) segment, we expect growth in the Power segment and public infrastructure projects to support revenue. Key focus areas for the quarter include the seasonal peak in cash flow, the sustainability of the profitability recovery in Norway, and order intake.
Here is a new company report on Eltel from Christoffer following the Q4 results.
Eltel ended 2025 strongly, as Q4 revenue was 4% higher than our forecasts and profitability continued to improve year-on-year for the tenth consecutive quarter. Importantly, Norway continued its return to profitability for the second consecutive quarter, which is crucial for the entire turnaround story. We believe that the continuous development of new business areas (11% of FY2025 revenue vs. 4% last year), combined with demonstrated operational and commercial improvements, supports the improvement in profitability. Management expressed confidence in achieving the 5% adjusted EBITA margin target within 12â18 months, providing a timeline for the first time since its withdrawal in Q3â24. While this is encouraging, we remain more cautious and believe the burden of proof is on Eltel to show that this is achievable. However, we are raising our 2026-27e revenue forecasts by 1â2%, primarily reflecting stronger performance in Sweden, while keeping our profitability forecasts largely unchanged.
Here are the pre-comments from Christoffer as Eltel releases its Q1 results on Thursday, April 30.
We expect the report to show a continuation of the companyâs positive profitability trend, which would be the eleventh consecutive quarter of year-on-year profitability improvement. Although Q1 is seasonally the quietest period for Eltel as weather conditions impact construction activities, we predict that strong development in the Swedish market and growth in new business areas, such as data centers and solar power, will support moderate revenue growth. In the report, we focus on the sustainability of the Norwegian turnaround, the development of new business segments, and qualitative comments on the market outlook following the quarterâs turbulent geopolitical situation.
Here are ABGâs preview thoughts regarding Eltelâs Q1.
We expect Eltel to report Q1 net sales of EUR 178m, up 5% y-o-y, of which +3% organic. We expect to see mixed demand signals from Eltelâs end-markets, with Communications expected to remain subdued, especially in Norway, while the order momentum in Power seems to be clearly better. Profitability should improve y-o-y, partly due to more contracts rolling over to new, better commercial terms as of 2026, and partly due to growth in ânew business areasâ, which according to the company are also margin-accretive. However, we remind that Q1 is a seasonally small quarter, and we therefore see the y-o-y trend as more important than the absolute EBITA number. That being said, we model an adj. EBITA of EUR 2.0m (up from 0.9m in Q1â25), for a margin of 1.1% (0.5%).
Christoffer has shared his comments now that Eltel has signed a 60 million deal with Elisa.
Eltel announced a new framework agreement with the Finnish telecommunications leader Elisa, worth approximately EUR 60 million. We view the agreement positively, as it builds on an existing strategic relationship and increases visibility for Eltelâs Finnish operations until 2029. We are keeping our forecasts unchanged ahead of the Q1 report to be published later today.
I have been building a moderate position in this over the past year (with an average price starting with an eight) with the idea that the market in the target regions, i.e., the Nordics, will develop favorably over the coming years due to electrification, data centers, and other trends, even if the communication side remains more focused on upgrades and maintenance for now. The second reason is the companyâs potential turnaround in terms of profitability. Managementâs share purchases have given extra confidence in the turnaround, and in my opinion, both theses are starting to look very likely, especially based on this result (but also the previous quarters). The company isnât very âsexyâ and hardly anyone seems to follow it, judging by the silence in this thread, for example. This has probably partly kept the share price modest.
This is great, and especially this comment from the CEO is heartening: âIn Q4, I stated that I was confident that we would reach our profitability target of 5% within 12 to 18 monthsâ time and now, one quarter later, the positive start of 2026 strengthens my belief in this.â
Perhaps weâll start seeing a bit of a re-rating soon.
Christoffer has published a new company report following Eltelâs Q1
Eltelâs Q1â26 report clearly exceeded our forecasts for both the top and bottom lines, indicating that the turnaround is not only remains intact but is progressing faster than we predicted. Although Q1 is seasonally the quietest period, Eltel achieved 11% organic growth and a stronger-than-expected improvement in profitability, supported by strong execution in the Finnish Power segment and maintained profitability in Norway for the third consecutive quarter, further confirming the unitâs ongoing turnaround. Management reiterated their confidence in reaching the 5% adjusted EBITA margin target within the previously announced 12-18 month timeframe, and the strong Q1 result reinforced this conviction. While this is encouraging, we remain more cautious and believe that Eltel must prove that the 5% target is achievable within managementâs schedule. However, we are raising our 2026-27e earnings forecasts following the report, primarily reflecting the stronger-than-expected Q1 performance. At the current valuation, we continue to see good risk-adjusted return potential and reiterate our Accumulate recommendation with a target price of SEK 11.2 (was SEK 10.2).
A nice-sized contract coming in: âŹ275M / 8 years. The share price also took a small jump on the news today. Hopefully, this is again part of that renewable contract base with healthier margins. Eltelâs momentum is looking good.
Here are Christoffer Jennelâs comments regarding the Vattenfall contract
Eltel announced on Monday a service and maintenance contract award from Vattenfall Eldistribution, valued at approximately EUR 138 million for the initial four-year contract period, which could rise to EUR 275 million including four option years. The contract represents new volume for Eltel, whose previous work with Vattenfall had focused on smart meter rollouts, and we believe it marks a significant expansion of this relationship. In our view, the agreement improves the visibility of our medium-term forecasts for the Swedish unit and creates upward pressure on our estimates, although we are awaiting the signing of the final contract before revising them.
If you have any questions youâd like Christoffer to answer, feel free to write them here!
