Goldman Sachs Raises KONE's 2026-27 Earnings Forecasts After Strong Q1 Results

Overview

This report is Goldman Sachs' quick update on KONE Corp. following its Q1 2026 earnings release. The key action is revising earnings forecasts based on better-than-expected Q1 results and the company's raised annual guidance. Due to Goldman Sachs' current role as financial advisor to KONE on strategic matters, the report maintains a 'Not Rated' status with no target price, in compliance with internal policies.

Core views

Strong Performance and Upgraded Guidance: KONE delivered robust Q1 2026 results, exceeding market expectations. As a result, the company raised its full-year organic sales growth (OSG) guidance from 2-6% to 3-6%, reflecting resilience in order intake and revenue recognition. Earnings Forecasts Revised: Based on the stronger start and higher revenue guidance, Goldman Sachs has raised its financial forecasts for KONE over the next two years. Specifically, FY2026 sales forecasts are up by 0.3%, and FY2027 by 2%; adjusted EBIT forecasts for FY2026 are raised by 1%, and FY2027 by 3%, indicating expectations of continued margin expansion alongside revenue growth. Valuation and Rating Status: The report explicitly notes that due to Goldman Sachs' advisory role on announced strategic matters involving KONE, potential conflicts of interest necessitate the removal of investment ratings and target prices under internal policies. The current market reference price is approximately €52.00.

Analysis framework

Event-Driven Adjustment Logic: The report employs a typical 'post-earnings tracking' framework. The firm first evaluates the gap between actual disclosed data (1Q26 results) and prior expectations (Surprise), confirming the earnings beat. Top-Down Guidance Transmission: Next, changes in management's forward guidance (OSG guidance raised from 2-6% to 3-6%) are used as key inputs for adjusting long-term models. Financial Model Fine-Tuning: Finally, quantitative models propagate the revenue and guidance changes to specific financial metrics (Sales, EBIT, EPS), resulting in new forecast values. This approach focuses on the immediate impact of marginal changes on valuation models, rather than reconstructing long-term industry logic.

Methodology notes

• Company Fundamentals & Financial Framework

  Post-Earnings Estimate Revision

  Refers to the method where analysts fine-tune existing earnings models based on actual quarterly or annual results and updated management guidance. This helps capture the impact of short-term performance fluctuations on long-term valuations.

• Event-Driven & Behavioral Finance

  Regulatory Quiet Period & NR Policy

  When an investment bank's division is involved in a client's major strategic transaction (e.g., M&A, restructuring), the research department typically suspends ratings and target price releases to avoid conflicts of interest and insider trading suspicions. Investors should note that reports during this period provide only data updates without directional recommendations.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• KONE Corp. (KNEBV.HE)

  Direct coverage target, beneficiary of earnings beat

  Strengths

  Strong Q1 performance, raised full-year organic growth guidance, improved profitability forecasts

  Weaknesses

  Lack of sell-side rating support due to advisory relationship, liquidity may be impacted by institutional position adjustments

  Risks

  Uncertainty over strategic matters, macroeconomic impact on elevator replacement demand

Key data

• 2026E Sales Forecast Adjustment+0.3%Increase from previous forecast
• 2027E Sales Forecast Adjustment+2%Increase from previous forecast
• 2026E Adjusted EBIT Forecast Adjustment+1%Increase from previous forecast
• 2027E Adjusted EBIT Forecast Adjustment+3%Increase from previous forecast
• Organic Sales Growth (OSG) Guidance3-6%Raised from previous 2-6%
• Reference Share Price€52.00As of May 4, 2026 closing price

Impact & implications

For investors, this update confirms that KONE's operational momentum in early 2026 is stronger than previously feared. The raised guidance alleviates some uncertainty regarding demand weakness. However, the absence of explicit buy/sell ratings means investors must rely on their own valuation judgments. Goldman Sachs' upward revisions can be seen as implicit endorsement of the sustainability of KONE's performance improvement.

Risks

• Goldman Sachs' advisory role may create conflicts of interest, affecting report objectivity
• Failure or delay in strategic matters could impact share price performance
• Global macroeconomic volatility may affect new installations and maintenance demand

What to watch

• Progress and announcements regarding strategic matters
• Whether subsequent quarters' organic sales growth (OSG) remains at the upper end of the 3-6% guidance range
• Impact of raw material cost fluctuations on adjusted EBIT margins