Last Update 13 Dec 25

Fair value Increased 3.06%

TOM: Poland Rollout And Index Inclusion Will Support Upside Ahead

Analysts have modestly raised their fair value estimate for Tomra Systems to approximately NOK 154 from about NOK 150, reflecting a slightly lower discount rate, improved long term margin expectations, and a still supportive but somewhat lower future earnings multiple despite mixed recent Street price target revisions.

Analyst Commentary

Street research on Tomra Systems has turned more mixed, with some bullish analysts growing more constructive on the risk reward while others remain cautious on execution and end market headwinds.

Bullish Takeaways

Bullish analysts highlight the recent upgrade to a Buy rating as evidence that the current share price already discounts much of the recent operational softness, leaving room for upside as execution improves.
The reaffirmed price target in the mid 150s suggests confidence that Tomra can sustain attractive long term growth in deposit return systems and resource recovery, supporting a premium multiple versus peers.
Supportive views emphasize that structural drivers, such as tightening regulation around recycling and circular economy initiatives, should underpin volume growth and margin expansion over time.
More optimistic forecasts assume that rollout challenges in new deposit return systems markets are temporary, and that smoother implementation could unlock higher earnings power than currently reflected in consensus.

Bearish Takeaways

Bearish analysts point to the lower price target in the mid 130s as evidence that near term earnings risk remains elevated, warranting a discount valuation until visibility improves.
Concerns focus on rollout risks in new deposit return systems markets, where delays and operational complexity could weigh on revenue conversion and margin delivery.
Intensifying competition and ongoing weakness in recycling are seen as structural headwinds that could cap Tomra's pricing power and slow growth, particularly if new entrants pressure returns.
More cautious views argue that subdued earnings momentum and execution risk justify maintaining only a Hold stance for now, even after the recent pullback in the share price.

What's in the News

TOMRA secured an order to supply 3,000 reverse vending machines to Polish retailer Dino Polska, with installations starting in the coming weeks and continuing through the first half of 2026. This supports Poland's newly launched national deposit return system (Key Developments).
Tomra Systems ASA has been added to the Oslo OBX Total Return Index, increasing its visibility and potential ownership among index tracking investors (Key Developments).

Valuation Changes

The fair value estimate has risen slightly to around NOK 154 from roughly NOK 150, reflecting improved long term margin assumptions and a lower discount rate.
The discount rate has fallen marginally from about 8.10 percent to approximately 8.06 percent, modestly increasing the present value of future cash flows.
Revenue growth has been revised down from roughly 16.9 percent to about 14.9 percent, indicating slightly more conservative top line expectations.
The net profit margin has increased from around 11.5 percent to roughly 12.7 percent, signaling expectations for better profitability despite softer growth.
The future P/E has edged down from about 19.3x to approximately 18.8x, implying a modestly lower valuation multiple applied to Tomra Systems forward earnings.

Expansion into new markets and tighter EU regulations are driving strong demand and recurring revenue growth in reverse vending, recycling, and sorting solutions.
Strategic innovation and cost control position Tomra for earnings growth and margin improvement despite recent macroeconomic challenges and delayed customer investment.
Margin pressure and unpredictable growth threaten Tomra due to weak recycling demand, macroeconomic uncertainty, tariff risks, and volatile order flows in key markets.

Catalysts

About Tomra Systems

Provides sensor-based solutions for optimal resource productivity worldwide.What are the underlying business or industry changes driving this perspective?

The upcoming implementation of new deposit return systems in multiple countries (including Poland, Portugal, Spain, Moldova, and ongoing progress in the UK) is set to significantly expand Tomra's addressable market for reverse vending machines and services, supporting strong future revenue growth and higher recurring service revenues.
EU regulations mandating higher recycled content in plastics-rising to 35% by 2030-are expected to substantially increase demand for Tomra's advanced recycling and sorting solutions as the regulatory environment tightens, driving improved long-term order intake and supporting revenue and margin expansion in the Recycling segment.
Rising global focus on automation, quality, and food safety is accelerating investments in sorting technologies across fresh produce categories, as evidenced by record order intake and order backlog in Food; ongoing innovation and restructuring initiatives are enhancing gross and EBITA margins, supporting higher future earnings.
Tomra's strategic push in adjacent verticals-such as reusable packaging collection and advanced feedstock facilities-positions it to capture incremental growth as circular economy models gain adoption, providing diversification of revenue streams and potential for long-term margin improvement.
Despite recent macroeconomic headwinds and tariff impacts delaying customer investments, Tomra is maintaining robust cost control and product innovation, which, coupled with the expected normalization of customer CapEx cycles and favorable secular tailwinds, is likely to drive a rebound in revenues and net margins once uncertainty abates.

Tomra Systems Earnings and Revenue Growth

Tomra Systems Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Tomra Systems's revenue will grow by 14.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 7.7% today to 12.4% in 3 years time.
Analysts expect earnings to reach €254.3 million (and earnings per share of €0.73) by about September 2028, up from €104.8 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as €179 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 21.6x on those 2028 earnings, down from 35.9x today. This future PE is lower than the current PE for the GB Machinery industry at 27.9x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.55%, as per the Simply Wall St company report.

Tomra Systems Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Weak order intake and declining backlog in the Recycling division, especially due to continued challenges in the European plastics market and macroeconomic/tariff uncertainty in the U.S., introduce significant revenue and earnings risk if customers keep postponing investments.
Overcapacity and cheap virgin plastics in Asia suppress recycled material prices in Europe, undermining the economic case for recycling and putting downward pressure on Tomra's long-term growth in its core segment, risking margin compression and volatile top-line results.
Heightened macroeconomic and tariff uncertainty, particularly in the U.S. and China, creates an unpredictable business environment for multiple divisions (Recycling and Food), with potential for recurring margin impacts, delayed orders, and reduced earnings visibility.
Tariff exposure and the need to rapidly adapt production locations to navigate trade tensions increase cost pressures and operational complexity, potentially eroding net margins if Tomra cannot consistently pass along cost inflation to customers.
There is ongoing risk of order volatility and growth plateaus in mature Collection markets, while expansions in new markets (e.g., Poland, Portugal, Spain) are subject to timing uncertainties, competitive pressures, and a dependence on regulatory implementation-impacting near
and mid-term revenue growth and cash flow predictability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of NOK174.983 for Tomra Systems based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of NOK211.29, and the most bearish reporting a price target of just NOK128.16.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €2.1 billion, earnings will come to €254.3 million, and it would be trading on a PE ratio of 21.6x, assuming you use a discount rate of 7.6%.
Given the current share price of NOK148.8, the analyst price target of NOK174.98 is 15.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

TOM: Order Win And Index Inclusion Will Support Near-Term Market Recovery