Last Update 02 Jun 26

NOTE: Refined Risk Profile Will Support Future Upside Potential

Analysts reduced their SEK price target on NOTE by SEK 5.50, citing updated views on the company’s risk profile and earnings potential. These changes are now reflected in slightly lower P/E and discount rate assumptions.

Analyst Commentary

Recent research on comparably repriced stocks highlights how shifts in perceived risk and earnings visibility can quickly feed into valuation frameworks. While the specific reports focus on other companies, the themes are similar to what is now reflected in NOTE’s updated P/E and discount rate assumptions.

Bullish Takeaways

Bullish analysts often point to a clear operational plan and cost discipline as key supports for valuation, even when price targets are trimmed. This suggests that execution can still justify a premium P/E if delivery improves.
Where analysts see a credible path to financial stability, they tend to keep some upside in their models. This can apply to NOTE if management continues to refine its earnings profile and risk controls.
Incremental adjustments to price targets rather than wholesale cuts are sometimes framed as recalibration instead of a loss of confidence. This indicates that the core equity story remains intact when fundamentals are viewed as manageable.
When business models are seen as resilient, bullish analysts typically argue that modest changes to discount rates or earnings inputs do not fully derail long term growth opportunities. The main impact is on the multiple investors are willing to pay today.

Bearish Takeaways

Bearish analysts tend to focus on downside scenarios for cash flow and earnings. These scenarios feed directly into higher discount rates and lower justified P/E ranges, similar to the move seen in NOTE’s revised target.
Concerns around balance sheet strength or funding access often translate into steeper valuation haircuts, with analysts assigning greater weight to dilution or refinancing risk in their models.
Execution risk, such as uncertainty around scaling profitably or meeting guidance, usually leads bearish analysts to apply more conservative growth assumptions and to shave price targets accordingly.
Heightened regulatory or listing related risks in other stocks are frequently used as reference points. These reminders underscore that if market confidence weakens, valuation can compress even without a major change in reported results, a consideration now reflected in NOTE’s revised risk profile.

What's in the News

At the Annual General Meeting on April 23, 2026, shareholders resolved in line with the Board of Directors' proposal that no dividend will be paid for the year (source: AGM resolution).
New guidance for Q1 2026 sets expected net sales in the range of SEK 930 million to SEK 960 million, with STI expected to contribute around SEK 20 million (source: company guidance).
For Q1 2026, the underlying operating margin is guided to 8.5% to 9.0% (source: company guidance).
For the remainder of 2026, STI is expected to contribute approximately SEK 550 million to SEK 600 million in revenues (source: company guidance).
The operating margin for full year 2026 is guided to 9.5% to 10.5% (source: company guidance).

Valuation Changes

Fair Value: SEK 209.50 remains unchanged between the earlier and updated assessment.
Discount Rate: moved slightly lower from 8.03% to 8.00%, indicating a small adjustment to the risk input used in the model.
Revenue Growth: held steady at around 18.08%, with only a rounding level change between the previous and updated figures.
Net Profit Margin: effectively unchanged at around 7.93%, showing only a minor technical adjustment in the model.
Future P/E: eased slightly from 15.01x to 14.99x, reflecting a modest reduction in the valuation multiple applied to expected earnings.

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Key Takeaways

Strategic production shifts and merger plans aim to sustain margins and improve profitability through cost reduction and efficiency gains.
Targeted growth in Security & Defense and Greentech segments indicates potential revenue increases and improved net margins.
Reliance on large customers and macroeconomic pressures could risk revenue growth, while weak market segments may hinder overall performance.

Catalysts

About NOTE

Provides electronics manufacturing services in Sweden, Finland, the United Kingdom, Bulgaria, Estonia, China, and internationally.What are the underlying business or industry changes driving this perspective?

NOTE plans to move production from China to European facilities if U.S. tariffs remain, potentially maintaining revenue without losing business. This strategic shift can help sustain operating margins by avoiding tariff-related costs.
Despite short-term challenges, NOTE sees opportunities for growth in the Security & Defense segment, partly due to increased demand and shorter lead times. This growth could drive future revenue increases and bolster profitability.
The planned merger of UK factories from four to three aims at reducing the cost base and sustaining margins, which can improve net margins and bolster earnings in the future.
NOTE is focused on streamlining operations and reducing inventory, leading to improved cash flow and potential revenue growth. Improved cash management could enhance net margins through efficiency gains.
The focus on growing industrial Greentech and security markets signals potential revenue growth in segments with high growth potential, likely positively impacting overall earnings and net margins.

NOTE Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming NOTE's revenue will grow by 18.1% annually over the next 3 years.
Analysts assume that profit margins will increase from 7.1% today to 7.9% in 3 years time.
Analysts expect earnings to reach SEK 492.7 million (and earnings per share of SEK 15.39) by about June 2029, up from SEK 268.0 million today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 15.4x on those 2029 earnings, down from 19.4x today. This future PE is lower than the current PE for the GB Electronic industry at 32.0x.
Analysts expect the number of shares outstanding to grow by 0.23% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.99%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Uncertainty surrounding U.S. tariffs and international trade could negatively impact sales that are connected to the U.S., potentially affecting revenue growth.
The company's reliance on a few large customers, as represented by a significant portion of sales coming from the Top 25 customers, suggests potential risk in revenue concentration if any major customer reduces orders.
The anticipated negative global economic outlook, including lowered growth forecasts, could have a dampening effect on NOTE's overall revenue potential.
Continued challenges in certain segments like Communications and MedTech, expected to remain weak, may hinder robust revenue growth across the company’s diverse operations.
Macroeconomic factors such as salary inflation in the U.K. and fluctuating currency rates could pressure net margins if cost increases are not fully offset by pricing strategies or operational efficiencies.

Valuation

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

The analysts have a consensus price target of SEK209.5 for NOTE based on their expectations of its future earnings growth, profit margins and other risk factors.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be SEK6.2 billion, earnings will come to SEK492.7 million, and it would be trading on a PE ratio of 15.4x, assuming you use a discount rate of 8.0%.
Given the current share price of SEK181.7, the analyst price target of SEK209.5 is 13.3% 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.

NOTE: Fair Value Outlook Will Remain Steady As Projections Hold