KOG: Post Selloff Rating Upgrades Will Drive Future Share Rebound

Analysts have trimmed their price target for Kongsberg Gruppen from approximately NOK 301 to NOK 289, reflecting slightly lower long term growth and margin assumptions, even as recent rating upgrades highlight improved sentiment following the post earnings share pullback.

Analyst Commentary

Analyst sentiment has shifted more positively following the recent share price pullback, with several rating upgrades signaling that valuation is now seen as more balanced relative to medium term growth prospects and execution risk.

Bullish Takeaways

• Bullish analysts argue that the post earnings selloff has reset expectations and created a more attractive entry point, narrowing the downside risk relative to the company long term growth profile.
• Upgrades to Hold and Buy suggest increasing confidence that current backlog and demand visibility can support mid single digit to high single digit revenue growth, even with more conservative margin assumptions.
• The clustering of upgrades around a similar time frame is viewed as a sign that most of the negative near term news is now reflected in estimates and valuation multiples.
• Price targets in the mid NOK 250s to high NOK 280s imply modest upside from current levels, indicating that analysts see a reasonable risk reward balance as execution continues.

Bearish Takeaways

• Despite upgrades, most targets remain below the prior NOK 298 to NOK 301 range, which underscores that analysts continue to apply a discount for execution risk and potentially slower margin expansion.
• Some analysts are only willing to move to Hold, which signals that visibility on long term earnings power is still limited and that a premium valuation is not yet justified.
• The reduction in price targets highlights ongoing caution around cyclical defense and maritime demand, where any delays in projects or orders could pressure the current growth narrative.
• Bearish analysts emphasize that, while the risk reward has improved, further share price appreciation is likely to depend on consistent delivery against guidance and evidence that order intake can sustain elevated levels.

What's in the News

• The board has proposed a demerger to create two focused and independent companies, spinning off Kongsberg Maritime as a separately listed maritime technology company and consolidating Kongsberg Defence & Aerospace and Kongsberg Discovery into a single defence and technology group (Key Developments).
• The planned demerger and listing of Kongsberg Maritime on Euronext Oslo will be carried out without raising new capital. Existing shareholders will receive one share in the new MAR entity for each Kongsberg share held, preserving the current ownership structure, including the Norwegian state (Key Developments).
• The Norwegian state, through the Ministry of Trade, Industry and Fisheries, has expressed support for the demerger proposal. The transaction is targeted for completion in the second quarter of 2026, following publication of a demerger plan in December 2025 and an extraordinary general meeting in January 2026 (Key Developments).
• In connection with the planned demerger, Kongsberg Discovery President Martin Wien Fjell has been designated as the future Chief Financial Officer of Kongsberg Gruppen, taking over when the split of Kongsberg Maritime is completed. Current CFO Mette Toft Bjørgen will become CFO of the newly listed Kongsberg Maritime (Key Developments).

Valuation Changes

• Fair Value Estimate has fallen slightly from around NOK 301.3 to NOK 289.1, implying a modest reduction in the intrinsic valuation per share.
• Discount Rate has risen marginally from about 6.87 percent to 6.90 percent, reflecting a slightly higher required return in the updated model.
• Revenue Growth has edged down from roughly 14.23 percent to 14.07 percent, indicating a small tempering of long term top line expectations.
• Net Profit Margin has decreased very slightly from around 11.37 percent to 11.36 percent, suggesting only a minor change in long term profitability assumptions.
• Future P/E has fallen from approximately 34.9x to 33.7x, signaling a modest compression in the forward earnings multiple embedded in the valuation.