Rockwool (CPSE:ROCK B): How the New 2025 Margin Guidance Shapes Its Valuation

Rockwool (CPSE:ROCK B) updated its outlook for 2025, narrowing its expected EBIT margin to a range between 14% and 15%. This update follows previous guidance of below 16%, and revenue is still projected at last year's level.

See our latest analysis for Rockwool.

Rockwool’s updated margin outlook came right as the stock is navigating a tough stretch. The 1-month share price return is -13.1% and year-to-date the stock is down nearly 20%. Despite the recent slide, its 3-year total shareholder return is still comfortably positive, which hints at longer-term resilience even as near-term momentum fades.

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With shares trading at a steep discount to analyst targets and margins reset lower, investors must ask themselves: does this price reflect all the risks and rewards ahead, or is there now an opening for future gains?

Most Popular Narrative: 28.5% Undervalued

Rockwool's most widely watched narrative places its fair value significantly above the last close, highlighting a substantial pricing gap between the company’s future prospects and where shares now trade. This valuation sets the backdrop for a deeper look into the catalysts that could potentially bridge that distance.

Ongoing and near-term capacity expansions in key growth markets (U.S., Romania, India, West Coast U.S., France), including new electrified production lines, position Rockwool to capitalize on surging demand from tighter building codes and energy efficiency mandates, supporting both top-line growth and higher utilization-driven margin leverage over the medium to long term.

Read the complete narrative.

Curious about what bold projections are powering this valuation? Hidden inside the narrative are aggressive forecasts on future sales, profit margins, and a premium earnings multiple rarely given to industrials. Explore the full story to see what experts believe justifies such a large upside. These underlying numbers may surprise even seasoned investors.

Result: Fair Value of $286.23 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing margin pressures and subdued European construction demand could quickly reshape the outlook if market conditions worsen further.

Find out about the key risks to this Rockwool narrative.

Another View: The DCF Model Perspective

While analysts' consensus sees Rockwool as significantly undervalued based on future earnings expectations, our SWS DCF model suggests the stock is actually trading above its fair value, with a fair price estimate of DKK191.27 versus the current price. This contrast highlights how much investor optimism is priced in. Are the bullish forecasts justified, or could expectations be running ahead of fundamentals?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Rockwool for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 895 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Rockwool Narrative

If you think the story could be different, or want to dig into the numbers yourself, you can craft your own perspective in just a few minutes. Do it your way

A good starting point is our analysis highlighting 6 key rewards investors are optimistic about regarding Rockwool.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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