Bouvet (OL:BOUV) was upgraded to "buy" by Kepler Cheuvreux on Monday, maintaining a NOK60 target price despite Q4 revenues falling 6% below estimates. Analyst Håkon Nelson attributed the temporary slump to an overreaction, citing resilient demand in infrastructure, public-sector, and defense projects. The stock has dropped 20.3% year-to-date, trading at NOK49.10 near its 52-week low.

The Q4 revenue miss of 5% stemmed from weaker billing ratios, holiday-related absences, and cautious consulting demand. However, Kepler emphasized Bouvet’s strong 15% average EBITDA margin—surpassing the peer median of 11%—and stable cash generation. The firm reduced 2026 revenue estimates by 1.3% and 2027 forecasts by 1.1%, citing salary growth outpacing hourly rate increases, which pressured margins. Despite this, Kepler views headcount stabilization and rising efficiency-focused project demand as positive signs.

Bouvet proposed a NOK3 per share dividend for 2025, matching last year’s base payout. Free cash flow forecasts for 2026 and 2027 stand at NOK480.4 million and NOK491 million, respectively. The stock trades at 13.0 times 2026 earnings and 12 times 2027 earnings, with implied dividend yields of 7.0% and 7.6%. Kepler justifies a modest 15.8 times 2026 P/E ratio, citing Bouvet’s resilient client base and AI-driven demand for complex integrations.

Kepler’s analysis suggests Bouvet’s valuation reflects long-term stability, with AI reshaping rather than reducing demand. The firm noted increased hiring in recent quarters, signaling stabilizing market conditions. At NOK49.10, the stock offers a 9.4% free cash flow yield in 2026, positioning it as a potential value play amid sector volatility.