ROCK B: Deep Value And Margin Recovery Will Drive Long-Term Upside Potential

Analysts have trimmed their price target on Rockwool to about DKK 250 from roughly DKK 278, reflecting a slightly higher discount rate and lower margin assumptions, even as they acknowledge improving revenue growth prospects and see deep value at current share levels.

Analyst Commentary

Bullish analysts highlight that the recent target price revisions still imply meaningful upside from current levels, pointing to what they describe as deep value in the shares. They argue that the company is better positioned for an eventual pickup in construction activity and insulation demand, which could support both top line growth and operating leverage over time.

Bearish analysts, however, caution that execution risks and a slower than expected margin recovery justify only modest upward revisions to valuation, or even slight cuts to price targets. They stress that while the long term structural story remains intact, near term earnings volatility and macro uncertainty continue to cap how aggressively they can underwrite multiple expansion.

Bullish Takeaways

• Recent upgrades and higher target prices from some bullish analysts reflect growing confidence that Rockwool can capture accelerating demand in insulation, supporting a healthier medium term growth trajectory.
• The shares are viewed as offering deep value relative to long term earnings power, with upside potential if margins normalize and the company executes on cost efficiencies.
• Improved sentiment around the construction cycle and energy efficiency investments is seen as a positive catalyst for revenue growth and mix, which could drive a re rating of the stock.
• Bullish analysts see room for Rockwool to sustain or gradually expand returns on capital as operating discipline improves, which they believe justifies a premium to current depressed valuation multiples.

Bearish Takeaways

• Bearish analysts trimming price targets argue that slower than expected margin recovery and cost inflation warrant more conservative earnings and valuation assumptions.
• They highlight execution risk around delivering consistent profitability in a still choppy construction environment, which may limit near term multiple expansion.
• There is concern that a more muted macro backdrop could delay the realization of the long term growth thesis, which could lead to prolonged share price underperformance versus peers.
• Some caution that, while the stock looks inexpensive on headline metrics, visibility on the pace of recovery remains limited, which in their view justifies a neutral rather than strongly positive stance.

What's in the News

• Rockwool A/S revised its full year 2025 earnings guidance, now expecting an EBIT margin between 14% and 15%, compared with a previous outlook of below 16%. The company maintained its expectation that revenue will be roughly in line with last year (company guidance).

Valuation Changes

• Consensus Analyst Price Target: The fair value estimate has fallen moderately to about DKK 250 from roughly DKK 278, reflecting a more cautious outlook.
• Discount Rate: The discount rate has risen slightly to around 6.30% from about 6.24%, indicating a marginally higher perceived risk or required return.
• Revenue Growth: Revenue growth assumptions have increased meaningfully to approximately 4.8% from about 3.5%, suggesting stronger expectations for top line expansion.
• Net Profit Margin: Profit margin forecasts have declined modestly to around 12.4% from roughly 13.5%, pointing to a more conservative view on profitability.
• Future P/E: The assumed future price to earnings multiple has edged down to about 13.1x from roughly 13.8x, indicating slightly lower valuation expectations on earnings.