YIT - Return to growth in sight
YIT reports its Q4 results on February 6th. Aided by apartment unit completions, we expect to see the long on-going negative growth trend to reverse and profitability to improve clearly.
Apartment unit completion support growth and profitability
YIT reports its Q4 results on February 6th. We expect good profitability and growth, as expected apartment unit completions for FY 2025 are heavily skewed towards Q4. Our estimate for revenue growth in Q4 is at 8.5%, which would also mark the first quarter of positive growth for YIT during the past few years. We expect an adj. EBIT of EUR 24m, with Residential CEE as the main contributor. We further anticipate the healthy trend in profitability development of the contracting segments seen during the year to continue. Our 2025e adj. EBIT estimate of EUR 54m is in the upper half of the guidance range (EUR 40-60m). Despite the EBIT improvement, full-year earnings on our estimates remain negative and we anticipate that no dividend distribution will be proposed.
Residential CEE to drive growth and profitability in 2026
The end of 2025 will in our view mark a turning point for the unfavourable overall trend in recent years due to the weakened market conditions. The outlook for the Finnish construction market is still modest, but we expect to see improved demand for residential construction while for now remaining cautious regarding growth in the contracting segments. The Infrastructure segment in our view shows more growth potential, but order backlog support remains modest. The main driver for growth and profitability will be Residential CEE, supported by a good order backlog and demand. For 2026e, we estimate growth of near 8% and a notable improvement in profitability, with our adj. EBIT estimate at EUR 88m (2025e: EUR 54m).
REDUCE (ACCUMULATE) with a TP of EUR 3.0
Without larger changes to our estimates or views, we retain our TP of EUR 3.0, but lower our rating to REDUCE following share price increases. Valuation becomes more attractive on 2027 estimates, but uncertainty in market recovery and stretched near-term valuation limits upside.