Rauli has prepared a new company report following Suominen’s Q3. 
Suominen’s Q3 report contained limited new information after the preliminary data and guidance cut provided by the company two weeks ago. The new CEO will launch some kind of profitability program. In our opinion, this is necessary, considering the company’s loss-making earnings level. However, we believe the company’s valuation already prices in a higher earnings level than our forecasts, and thus the return expectation remains weak. We reiterate our Reduce recommendation and a target price of 1.6 euros.
Quoted from the report:
Price already reflects better-than-expected performance
We value Suominen using earnings and balance sheet-based multiples and a DCF model. The earnings improvement we forecast will go into digesting the multiples in the coming years, and even with a significantly better earnings level (2027), we consider the valuation high. With the dividend being zero in the coming years, it also does not offer support for the return expectation. Thus, we see the return expectation as weak.