Translation: Original published in Finnish on 7/14/2026 at 8:27 pm EEST.

Wärtsilä will report its Q2 results on Tuesday July 21, at 8.30 am EEST. Based on the orders received during the quarter, we expect it to have been very strong, as the Energy division secured several large data-center-driven orders. Given the high comparison figures, we consider the continuation of Energy's upward trajectory in order intake to be highly uncertain. However, we view the share valuation as more neutral than before, considering the recent strong order development and, conversely, the decreased share price. We raise our recommendation to Reduce (was Sell) and reiterate a target price of EUR 32.5.

Simplified structure – only Marine and Energy remain

Going forward, we will focus on the Energy and Marine segments at Wärtsilä, which have long accounted for the majority of the company's earnings. The other two business areas, Portfolio Business and Energy Storage, will be discontinued, as the company divested its remaining Portfolio Business operations in early June and, on June 15, announced the transfer of its Energy Storage business to a joint venture. Going forward, Energy Storage's results will be reported under discontinued operations, which is why we reduced our consolidated EBIT forecast by 2% for the coming years. On the other hand, we slightly raised our long-term growth forecasts for Energy following the strong order intake reported for Q2.

Energy's orders shot up again, making it hard to improve further

We estimate that Wärtsilä's combined order intake in Marine and Energy was 2.6 BEUR in Q2 (5% above the Vara consensus), which is a 33% increase from a very strong comparison period.

This increase is fueled by the timing of a few substantial Energy orders related to data centers during the quarter. Energy's order intake has been so strong in recent quarters that we expect it to begin declining in 2027 (-8%). If the company were to reiterate its positive outlook for order growth in Energy, we believe it would be a positive surprise that could lead to upward revisions of forecasts.

Outlook for Marine may strengthen after Q2

The latest demand outlook for Marine, announced in Q1, was stable. We expect orders to have declined by 4% in Q2, after which the outlook for the next 12 months could even be cautiously positive. So far, the closure of the Strait of Hormuz has not had a significant impact on Marine's business operations.

Q2 is expected to deliver a moderately good result

We estimate the adjusted EBIT for Marine and Energy to be 208 MEUR (consensus 207 MEUR). The forecast assumes that the adj. EBIT margin will strengthen to 14.3% (Q2’25: 13.6%), driven by factors such as volume growth, the pricing environment supported by strong market conditions in Energy, and a slightly higher share of service sales. However, revenue growth is likely to remain moderate, as we expect Energy to report low delivery volumes for new equipment sales in Q2.

Valuation at a neutral level

We see the share's valuation as more neutral than before, as order book development in Energy has exceeded our previous expectations, while the share price has decreased slightly. We estimate that the EV/EBIT-based valuation of the share will decrease to neutral or even moderately attractive levels in 2027-28, although P/E multiples will remain high due to an overly strong balance sheet. More significant upside would necessitate strong confidence in the continuation of data-center-driven demand over a multi-year horizon. Key drivers of the share price in the Q2 report include, among other things, Energy’s outlook guidance and the price level achieved on recent orders, which provides an indication of the profitability of the new, data center-driven market.