Arjo walked into its Q3 2026 report with a value story. The stock closed on 22 October at SEK32.32 after a strong run over the past three months, and expectations had crept higher. The fresh numbers told a tighter tale. Revenue for the quarter landed at SEK2,849m while basic earnings per share came in at SEK0.21, well below the prior quarter. The immediate share price reaction nodded to optimism, yet the real headline sat in profit pressure, not sales, as investors weighed a healthier top line against a clear squeeze in quarterly earnings power.
Love the healthier revenue line at Arjo but concerned about the squeeze in quarterly earnings power? See how it compares in terms of both sales momentum and profit resilience in our list of solid balance sheet and fundamentals stocks (205 results)
Q3 2026 Earnings Summary
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Revenue (Q3 2026 vs Q3 2025):SEK2,849m vs. SEK2,646m (up about 7.7%)
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Net Income, Excl. Extra Items (Q3 2026 vs Q3 2025):SEK58m vs. SEK81m (down about 28.4%)
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Basic EPS (Q3 2026 vs Q3 2025):SEK0.21 vs. SEK0.30 (down about 28.4%)
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Trailing 12-Month Basic EPS (TTM to Q3 2026 vs TTM to Q3 2025):SEK1.33 vs. SEK1.61 (down about 17.6%)
Arjo doubled down on its SEK 350m profit reset timeline. Ask Charlie what makes Arjo confident in SEK 350m profit gains .
Arjo bull case hinges on EBIT plan execution
The upbeat story says Arjo can use focus and efficiency to turn structural demand into better profit and cash generation.
"Internal cost efficiency efforts have been formalized into a SEK 350 million EBIT improvement programme that focuses on portfolio simplification, procurement savings and commercial discipline, which is intended to lift EBIT and cash conversion beyond what recent gross margin pressure would suggest."
Q3 shows early proof points. Adjusted EBIT rose to SEK247m, with margin moving to 7.2% reported, helped by a 1.9% gross margin gain and patient handling mix. Cash conversion around 100% and net debt at 2.2x adjusted EBITDA both align with the thesis that efficiency and discipline are starting to translate into healthier earnings quality.
Bear case tests Arjo margin and execution risk
The bear view questions whether margin pressure and a heavy change agenda will erode that EBIT ambition.
"Arjo has acknowledged pressure on gross margin from product and country mix, transportation and material costs, and pricing pressure in areas such as U.S. VTE prevention and rental, and if these factors persist or intensify, they could limit the effect of any efficiency gains and keep net margins and earnings below what a flat share price narrative implies."
Q3 does not erase this concern. Gross margin improved, but transport costs still weighed and the SEK35m U.S. tariff reimbursement contributed meaningfully. Working capital days rose from 82 to 88 as inventory built for Q4, and restructuring plus investment write downs lifted net financial items. Execution on the SEK350m plan remains unproven over a full cycle.
The price and this Narrative do not agree. → Uncover what this Narrative says Arjo is actually worth .
Hunt For Quiet Earnings Setups
Arjo shows that improving sales can still leave quarterly earnings under pressure for investors. The real opportunity sits in finding stocks that could be undervalued before the crowd chases them.
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Company 1 - 44% below our estimate - targets tolling fleets upgrading ageing 2G devices into mandated GNSS hardware on fixed schedules.
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Company 2 - 33% below our estimate - shifts lending toward policy supported energy and infrastructure projects while expanding its physical branch footprint.
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Company 3 - 23% below our estimate - leans into higher margin canned, dairy and ready to cook products as beer activities diversify earnings.
Those are three of them. See the full list of 195 companies trading below our fair value estimates →
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ARJO-B.ST .
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