JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
Introduction & Market Context
Nokian Tyres (HEL:TYRES) reported a significant improvement in its second-quarter performance, with operating profit increasing by 31% year-over-year. The Finnish tire manufacturer’s stock responded positively, rising 11.76% to €7.28 following the July 18 presentation, a notable recovery after falling 8.84% following disappointing Q1 results.
The company’s Q2 rebound comes as a welcome development for investors, particularly after Nokian missed earnings expectations in the first quarter with an EPS of -0.10 against forecasts of -0.08. The strong second-quarter performance indicates the company’s strategic initiatives and operational improvements are beginning to yield results.
Quarterly Performance Highlights
Nokian Tyres reported net sales of €343.7 million for Q2 2025, representing a 6.9% increase with comparable currencies from €324.6 million in the same period last year. More impressively, segments operating profit jumped to €26.3 million (7.7% of net sales), up from €20.1 million (6.2%) in Q2 2024.
As shown in the following chart of quarterly financial performance:
The company’s EBITDA also showed strong improvement, reaching €57.2 million (16.7% of net sales) compared to €46.8 million (14.4%) in the previous year. This performance marks a significant turnaround from Q1 2025, when the company reported an operating loss of €18.5 million.
Growth was consistent across all regions, with the Americas showing the strongest performance at 13% growth, followed by Other Europe at 7% and the Nordics at 4%. This regional distribution is illustrated in the following chart:
Business Unit Analysis
The Passenger Car Tyres business unit was the standout performer, with net sales increasing by 11.3% to €206.2 million and segment operating profit more than doubling to €15.9 million (7.7% of net sales) from €7.1 million (3.7%) in Q2 2024. The company attributed this improvement to higher sales volumes, price increases implemented in Q1, and lower manufacturing and supply chain costs.
The following chart details the performance of the Passenger Car Tyres segment:
A bridge analysis further illustrates the factors driving the improvement in this segment’s performance:
The Heavy Tyres business unit reported more modest growth, with net sales increasing slightly to €60.8 million from €60.2 million in Q2 2024. However, profitability decreased, with segment operating profit falling to €6.0 million (9.9% of net sales) from €7.6 million (12.7%) due to a weaker product mix.
The Vianor retail chain maintained stable performance with net sales of €97.7 million, up 1.2% with comparable currencies. Segment operating profit was €7.1 million (7.2% of net sales), slightly below the €7.5 million (7.8%) reported in Q2 2024, which the company attributed to cost inflation.
Strategic Initiatives
Nokian Tyres highlighted that its significant investment phase is approaching completion, with total investments for 2023-2025 expected to reach approximately €800 million. The company anticipates returning to an average capital expenditure of around €120 million thereafter. Capital expenditure in Q2 2025 was €37.7 million, significantly lower than the €89.2 million in Q2 2024.
As illustrated in the following investment chart:
The ramp-up of operations at the company’s new Romanian factory is proceeding according to plan, which should help strengthen Nokian’s European manufacturing footprint. Additionally, the company expects to receive approximately €100 million in Romanian state aid from 2025 onwards, which will lower net investments.
Nokian Tyres also highlighted its sustainability credentials, noting that it was ranked 98th on TIME magazine’s list of the world’s 500 most sustainable companies. The company maintains high ESG ratings, including a Climate A- rating from CDP and a Platinum rating (the highest level) from EcoVadis.
Market Challenges
Despite the overall positive performance, Nokian Tyres faces challenges in the North American market due to new tariffs. A 25% import tariff for passenger car and light truck tires has been in effect since May 3, 2025, and while market price levels are beginning to adapt to these tariff costs, the full impact is not yet visible.
The company is implementing several mitigation strategies, including reallocating selected product lines across factories, adjusting inventory levels, reassessing raw material supply, and adjusting pricing. Nokian’s local-to-local strategy, which emphasizes manufacturing in the markets where products are sold, is helping to mitigate some of these impacts.
Forward-Looking Statements
Nokian Tyres maintained its guidance for 2025, expecting net sales to grow and segments operating profit as a percentage of net sales to improve compared to 2024. The company’s assumptions include tire demand in its markets remaining at the previous year’s level, though it acknowledges that geopolitical, trade, and tariff uncertainties may cause volatility.
The company also announced several changes to its management team, effective September 1, 2025, including the appointment of Christopher Ostrander as SVP, Passenger Car Tyres, North America, Lauri Halme as SVP, Vianor, and Tron Gulbrandsen as SVP, Passenger Car Tyres, Nordics. These changes reflect Nokian’s sharpened commercial focus and commitment to strategic growth.
CEO Paolo Pompei, who had previously acknowledged challenges in Q1 by stating "We are not fully satisfied with the financial performance," now appears to be overseeing a more positive trajectory as the company’s strategic initiatives begin to deliver results. The Q2 performance suggests that Nokian Tyres is making progress toward its long-term targets, which include an EBITDA margin of 23-25% and an EBIT margin of 15%.
Full presentation:
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