Gränges closed Thursday at SEK174.10, with the share sliding over the past week and quarter even as the latest numbers landed. Q3 2026 was described as a record quarter, driven by a sharp lift in adjusted operating profit and a higher earnings base per share. The tension for you as an investor is between that profitability surge and a balance sheet still flagged for weak debt coverage and thin free cash flow support for the dividend. Short-term price fatigue is set against a multi-year story now presented as anchored in stronger earnings power and a discounted P/E.
Love the record profitability in Gränges but concerned about the weak debt coverage and thin free cash flow backing the dividend? Compare that mix with our list of solid balance sheet and fundamentals stocks (204 results).
Q3 2026 Earnings Summary
- Revenue (Q3 2026 vs Q3 2025): 9,485 million SEK vs. 6,933 million SEK (up about 37%)
- Net Income (Excl. Extra Items, Q3 2026 vs Q3 2025): 387 million SEK vs. 242 million SEK (up about 60%)
- Basic EPS (Q3 2026 vs Q3 2025): 3.63 SEK vs. 2.28 SEK (up about 59%)
- Adjusted Operating Profit (Q3 2026 vs Q3 2025): 596 million SEK vs. about 397 million SEK (up about 50%)
Earnings paint one picture for Gränges, but investors who care about what they are really paying for usually focus on the cash moving through the business. If you look at Gränges' cash flows alone, the stock could be a hefty 42% undervalued.
Gränges growth story meets profitability milestones
The bullish narrative banks on Asia growth, regional production and sustainability to lift Gränges’ earnings power.
"Gränges is experiencing strong sales volume growth, particularly in Asia with a 94% increase and continued market share gains in all regions and customer segments. This expansion is expected to boost future revenues."
Q3 volume rose only 1% to 154 kt. Adjusted operating profit per tonne jumped to about SEK 3,900, helped by fabrication margins, recycling gains and mix. Asia volumes were hit by the Shandong fire, but automotive there grew 17%, supporting the market share angle even if the volume growth milestone clearly slipped.
Bear case focuses on Shandong mix and cash strain
Bears worry that low margin volumes and heavy investment could blunt the upside and strain cash returns at Gränges.
"The ramp-up of the new facility in Shandong is currently at breakeven for profitability; reliance on low-margin product segments may not contribute strongly to net margins if mix improvements are not achieved."
Record adjusted operating profit of SEK 596m and margin gains, especially in Americas, argue against margin compression for now. Shandong is still a drag, with lost industrial volumes and extra tolling costs, and a SEK 300m work in progress build in Asia ties up cash. Net debt fell and leverage sits at 1.7x EBITDA, yet free cash flow support for the dividend remains thin.
The price and this Narrative do not agree. → Uncover what this Narrative says Gränges is actually worth.
Hunt For Mispriced Earnings Power
Gränges shows how record profitability can sit alongside a market that hesitates. The real opportunity sits in tracking stocks that could be undervalued before sentiment catches up.
- Company 1 - 29% below our estimate - uses a pipeline of new copper projects to push output higher as treatment charges tighten and by product credits deepen margins.
- Company 2 - 25% below our estimate - shifts more wafer capacity into AI focused server memory under long term supply agreements while building fresh fabrication and packaging facilities.
- Company 3 - 49% below our estimate - leans on a record backlog of large public works and defense infrastructure contracts that lock in multi year construction revenue and higher project margins.
That is three of the list. See the full list of 191 companies trading below our fair value estimates →
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