In this fundamental analysis, analysts Axel Carlius and Erik Lennvald take a closer look at
NOTE AB. NOTE is a Nordic electronics manufacturing services (EMS) provider transitioning
from a cyclical, industrially-focused contract manufacturer into a key Nordic defense subcontractor
with structurally higher margins. The Company is set to capitalize on surging European defense
spending, as its defense and security segment is expected to grow at roughly 30% annually through
2030 carrying 15–20% margins versus the ~10% margins of its legacy civil segments while total
revenue is estimated to grow at a CAGR of ~26% until 2027E. Based on an equally weighted peer
and DCF valuation using a target multiple of 12.1x 2027E EBIT, a target price of 285 SEK per share
is implied, corresponding to an upside of 66%.
Investment Highlights:
● Defense and security as the core growth engine, driving group EBIT margin expansion from 10.1% to 12.6%
● The market is underpricing NOTE’s mix shift toward higher-margin defense, anchoring to 2025 trough margins
● The STI Enterprises acquisition accelerates the transition while filling newly expanded production capacity