Kepler Cheuvreux has downgraded Kongsberg Gruppen to Reduce from Hold, saying the share price has appreciated faster than the company’s underlying earnings and business metrics. At the same time, the broker increased its price target to 337 Norwegian crowns from 252 crowns, while warning that the stock now carries a negatively skewed risk-reward profile.
In a note published Monday, Kepler analyst Martin Granviken acknowledged Kongsberg’s strong operational showing but flagged the recent multiple expansion as a concern. "While Kongsberg continues to deliver strong operational performance with high margins and strong order intake, the stock has once again experienced significant multiples expansion, moving ahead of fundamentals," he wrote.
Granviken highlighted the valuation gap between Kongsberg and its European defence peers, saying the current premium is difficult to justify on a standalone basis following the Maritime spinoff. "With the stock now trading at a clear premium to European defence peers, we see limited rationale for the stock to justify current levels on a stand-alone basis post Maritime spinoff," he added.
Market reaction on Oslo’s exchange ran counter to Kepler’s downgrade in the short term. Shares in the Norwegian defence and technology group rose 3% in Oslo, extending gains after a strong earnings release the previous week. The stock had jumped more than 15% on Friday after the company reported quarterly results that beat consensus.
Kongsberg reported Q4 sales of 16.8 billion Norwegian crowns, roughly 4% ahead of consensus estimates. Quarterly EBITDA came in at 2.95 billion crowns, beating expectations by 12-17% and lifting the margin to 17.6%, about 2 percentage points higher year on year. The company closed the year with an order backlog of 157.6 billion crowns, an increase of 23% year on year.
Segment-level performance was mixed. Defence & Aerospace delivered particularly strong profitability, with Q4 EBITDA of 1.7 billion crowns well above expectations and margins at 21.4%. Full-year order intake for the segment was about 50 billion crowns, down 8% versus the prior year, and included a rising share of unannounced contracts.
By contrast, Maritime recorded EBITDA of around 1 billion crowns for the quarter, while order intake in the segment fell 15% year on year amid softer vessel investment activity.
Reflecting the stronger-than-expected order dynamics and increased visibility into later years, Kepler lifted its EPS forecasts for 2026 and 2027. The broker raised its 2026E and 2027E EPS estimates by roughly 4% and 12%, respectively.
Despite those forecast upgrades, Granviken maintained that the valuation has moved too far ahead of fundamentals. Using a sum-of-the-parts approach, he said the current share price implies that Defence & Aerospace would trade at close to 30x 2027E EV/EBITDA on a standalone basis. "We find limited fundamental justification for such an outcome," he wrote, adding that additional upside would likely require further multiple expansion rather than being driven by earnings delivery.
Investors and market participants will be weighing the mismatch Kepler highlights between operational momentum and the premium investors are paying. The broker’s view signals that, in its assessment, future share price gains would depend more on sentiment and valuation expansion than on immediate earnings improvement.