Analyst suggests Nokian Tires may offer promising returns for investors

The tire manufacturer’s target prices vary widely, with Inderes analyst Rauli Juva giving a “buy” recommendation for Nokian Tires stock, predicting good returns over the next few years if forecasts are accurate. However, other analysts have expressed disappointment in the company’s recent results. Bloomberg’s consensus recommendation for the stock from 17 analysts is “hold,” reflecting the mixed views on its performance. There is a range of target prices for the stock, with the lowest at six euros and the highest at ten euros.

Juva believes that there is potential for upside in Nokian Tires stock, especially with the upcoming full production at the new Romanian plant in 2027-2028. This development is expected to significantly improve the company’s results and stock price. He emphasizes that the current valuation levels offer reasonable expected returns for the next few years, but it remains to be seen how quickly investors will price in the stock’s better earnings.

Despite challenges in production and the impact of external events like the Red Sea crisis and political strikes in Finland, Nokian Tires is working towards improving profitability and increasing volume in its business. The company’s operating results at the beginning of the year fell short of analysts’ forecasts, but there are expectations for a stronger performance in the future, particularly during the winter tire season.

Some analysts, like those from Oddo, have a more cautious outlook on Nokian Tires stock, recommending a “sell” rating and a target price of seven euros. They believe that the company still faces challenges and that improvements may not be realized until the completion of new production facilities in 2026-2027. The stock’s valuation is also considered high compared to its peers, raising concerns about its premium.