Goldman Sachs Maintains Sell Rating on NIBE, Raises Target Price to SEK34

Overview

Goldman Sachs' latest research report on NIBE Industrier AB maintains the Sell rating while raising the target price from SEK32.50 to SEK34.00. Despite the target price increase, the report still identifies approximately 21% downside potential. Primary concerns stem from 1Q26 results showing below-consensus margins across all three business segments, SEK150 million of Section 232 tariff incremental costs for the Stoves division, and valuation levels that appear elevated relative to the company's return profile.

Core views

Goldman Sachs' core concerns for NIBE center on margins and valuation. While 1Q26 adjusted EBIT was only modestly below Visible Alpha consensus figures (incorporating a positive Eliminations line of SEK100 million versus FY25's average -SEK32 million quarterly), this offset below-consensus margin performance across all three business segments. Group sales modestly exceeded consensus, but Stoves revenue came in 8% below Goldman's estimates, with the division expected to bear SEK150 million in Section 232 tariff incremental costs. Consequently, Goldman lowered its FY26 group margin forecast from 11.6% to 11.3% and reduced FY26 adjusted EPS estimates by ~2%. FY26/27 group adjusted EBIT forecasts now stand 3.9%/3.4% below consensus. Valuation-wise, NIBE currently trades at 19.5x 12-month forward consensus EV/EBIT, above its 2005-19 median of 14.9x. Compared with Ariston, NIBE's valuation multiples are more than double (Ariston at 6.2x), despite both companies delivering comparable ~8% 24-month forward ROIC and >15% EPS CAGR over 2025-30E. Additionally, NIBE carries higher leverage (FY26E net debt/EBITDA of 2.0x versus Ariston's 1.5x).

Analysis framework

Goldman Sachs employs relative valuation methodology, rolling forward its industry-relative EV/IC vs. ROIC/WACC framework to 9m27/3m28 (previously based on 12m27 forecasts). The target price implies forward EV/EBIT and P/E multiples of 16.6x and 21.4x respectively, compared with 2005-19 median multiples (pre-heat pump demand surge) of 14.9x EV/EBIT and 18.3x P/E. The report also benchmarks NIBE against industry peers (particularly Ariston) across valuation, ROIC, EPS growth, and leverage metrics to support its Sell rating. The report expects NIBE shares to underperform the industry, implying 21% downside versus the multi-industry median upside potential of +9%.

Methodology notes

• Valuation Methodology

  EV/IC vs. ROIC/WACC Relative Valuation

  Evaluates whether a company's valuation is reasonable by comparing the ratio of enterprise value to invested capital (EV/IC) against the ratio of return on invested capital to weighted average cost of capital (ROIC/WACC). High EV/IC multiples when ROIC approaches or falls below WACC typically indicate overvaluation.

• Corporate Fundamentals & Financial FrameworkROIC–WACC spread

  ROIC vs WACC Comparative Analysis

  The spread between ROIC (return on invested capital) and WACC (weighted average cost of capital) reflects a company's value creation capability. When ROIC nears WACC, the company's ability to generate excess returns becomes limited, making high valuation multiples unjustifiable.

• Industry/ Sector Analysis Framework

  Peer Valuation Comparison

  Assesses relative valuation reasonableness by comparing target companies against industry peers across valuation multiples, ROIC, and growth rates. The NIBE-Ariston comparison shows NIBE trading at more than double Ariston's multiples despite similar ROIC and EPS growth expectations, indicating relative overvaluation.

Asset mapping & comparison

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

• NIBE Industrier AB (NIBEb.ST)

  Covered security, Sell rating maintained

  Strengths

  Group sales modestly exceeded consensus; partial tariff cost offset possible via pricing/cost actions

  Weaknesses

  Margins below expectations across all three segments; Stoves revenue 8% below Goldman estimates; valuation above historical median; higher leverage than peers

  Comparison

  Versus Ariston, NIBE trades at more than double the valuation multiples (19.5x vs 6.2x EV/EBIT) despite both companies delivering comparable ~8% 24m Fwd ROIC and >15% EPS CAGR

  Risks

  Tariff cost pressures; weak European demand; margin pressure

• Ariston Holding

  Peer comparison for valuation reference

  Strengths

  Significantly lower valuation than NIBE (6.2x vs 19.5x EV/EBIT); lower leverage (1.5x vs 2.0x ND/EBITDA)

  Comparison

  Expectations for comparable ~8% 24m Fwd ROIC and >15% EPS CAGR over 2025-30E versus NIBE, but trades at significantly lower multiples

Key data

• Target PriceSEK34.00Raised from SEK32.50
• Current PriceSkr43.15As of May 18, 2026 close
• Implied Downside21.2%Target price downside versus current price
• FY26 Group Margin11.3%Lowered from 11.6%
• FY26 EBIT Forecast vs Consensus-3.9%Goldman forecast below consensus
• FY27 EBIT Forecast vs Consensus-3.4%Goldman forecast below consensus
• Current EV/EBIT Multiple19.5x12-month forward consensus
• Historical Median EV/EBIT14.9x2005-19 period
• Stoves Tariff CostsSEK150mSection 232 incremental tariff costs
• FY26E ND/EBITDA2.0xNIBE leverage (Ariston at 1.5x)

Impact & implications

Goldman Sachs views NIBE's current valuation as elevated relative to its return profile, with 21% downside potential. Tariff costs for the Stoves division and weak European demand will continue weighing on margin performance. Compared with peers, NIBE's valuation multiples appear significantly higher despite comparable return metrics, suggesting valuation reversion risk. The report expects NIBE shares to underperform the industry, implying 21% downside versus the multi-industry median upside potential of +9%.

Risks

• Energy-efficient heating system subsidies potentially boosting demand
• Changes in US export regulations/tariff policies (semiconductor market related)
• Better-than-expected sales growth from European construction market improvement
• Declining inflation and interest rates
• Better-than-expected cost improvements/M&A synergies
• Supply chain improvements
• Cost inflation/pricing pressures
• Margin pressure or market share loss risks from rising trade tariffs
• Favorable natural gas price movements or FX rates

What to watch

• Stoves division margin recovery
• Actual Section 232 tariff cost impacts and pricing pass-through capability
• European heating market demand changes
• Competitive pressure from Asian imports in European markets
• Key material cost inflation trends (e.g., copper)