Lundbergföretagen (OM:LUND B) Margin Decline Challenges Reliable Profitability Narrative

L E Lundbergföretagen (OM:LUND B) just posted its Q3 2025 results, reporting revenue of SEK6.6 billion and net income of SEK2.5 billion. EPS reached SEK9.98 for the quarter. Over the past year, revenue has ranged between SEK6.4 billion and SEK10.1 billion per quarter. EPS has varied from SEK-1.53 to SEK12.71, reflecting significant changes in underlying profitability.

See our full analysis for L E Lundbergföretagen.

Next, we will see how the latest financial results compare to the prevailing narratives and market expectations, and where the numbers might challenge conventional wisdom.

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Profit Margin Slides to 22.7%

• Net profit margin for the trailing twelve months came in at 22.7%, down from 25.3% a year ago. Reported net income reached SEK7.6 billion ($7.6 billion).
• Despite a healthy profit margin, prevailing analysis highlights that the drop from last year's margin marks a moderation in profitability, especially when considered alongside the average annual earnings decline of 0.1% over five years.
  • While the business continues to generate robust earnings, this shift challenges the consensus view that L E Lundbergföretagen is a reliably growing profit engine.
  • Another important factor is the size of recent one-off gains. A SEK2.8 billion gain has distorted underlying trends, so ongoing margin movement deserves a second look.
• The latest update complicates the consensus narrative that the company’s diversified structure automatically protects margins each year.
  Bulls and bears will both want to dig deeper into the full consensus perspective before making a move. 📊 Read the full L E Lundbergföretagen Consensus Narrative.

P/E Ratio Sits Below Market

• LUND B's price-to-earnings ratio stands at 16.7x, which is well below the Swedish market’s 22x average.
• Market analysis sees the valuation as reasonable in a local context, but notes a premium to the broader European diversified financial industry average of 13.8x.
  • The share price of SEK510 now trades slightly above the DCF fair value of SEK505.87. This may limit upside for new buyers.
  • Consensus narrative suggests that the company’s valuation buffer versus peers is a key support. However, pressure on margins tempers the case for a strong re-rating in the near term.

One-Off Gains Skew Comparisons

• Earnings were significantly lifted by a SEK2.8 billion one-time gain in the trailing twelve months, making historical comparisons less meaningful.
• Analysts caution that exceptional items can mask core performance and that reported results should not be viewed as a new normal.
  • L E Lundbergföretagen’s five-year average earnings trend, flat at -0.1% per year, provides a clearer picture than current headline numbers alone.
  • Margin declines in the underlying business, despite reported net profit strength, highlight the importance of considering more than just surface-level growth metrics.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on L E Lundbergföretagen's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

L E Lundbergföretagen faces questions around declining profit margins and inconsistent earnings. This dims the outlook for shareholders seeking steady growth.

Prefer more predictable performance? Check out stable growth stocks screener (2073 results) to discover companies that consistently deliver reliable revenue and earnings, even as conditions change.

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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