* Market conditions remain challenging, lowering Q4e volumes * We lower '25e-'27e adj. EBIT by 3-6% * 12x-11x '25e-'26e EV/EBIT adj. Automotive is the main culprit We expect the recent challenging market conditions to persist in Q4. In addition to generally subdued volumes and price pressure due to an oversupply of consultants, there are ongoing cost-saving measures in the important automotive end-market (including significant lay-offs at Volvo Cars, which are only starting to take their toll in H2'25), hurting demand further. On a positive note, the public sector and telecoms are starting to show signs of stabilisation, and Q4 is the first quarter with comparable y-o-y figures following the recent portfolio rebalancing. Nonetheless, we expect Q4 sales to drop 13% y-o-y, to SEK 3.6bn. Although gross margins have recently improved nicely (the Q3 metric was the highest since Q2'18), we expect the lower sales volumes to lower earnings, with adj. EBIT down 39% y-o-y, to SEK 33m. We take a more cautious view on the recovery With continued negative data points (e.g. PW from NNIT and muted KPIs from the Swedish National Institute of Economic Research), we are taking a more cautious view of the recovery. Consequently, we lower '25e-'27e adj. EBIT by 3-6% because of our slightly lower sales assumptions. Although estimate visibility is currently low, we continue to anticipate negative growth rates in H1'26, with some improvement in H2'26. 12x-11x '25e-'26e EV/EBIT adj. The share is trading at 12x-11x '25e-'26e EV/EBIT adj. (vs. peers at 11x-15x), which is largely in line with its 10Y avg. of ~12x. We continue to expect earnings to pick up well once demand returns, but we anticipate subdued earnings growth in the near term due to the challenging market. Furthermore, we are eager to learn about the new financial targets, due in 2026.
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