CARL B: Share Gains Will Likely Overshoot Weaker European Volume Prospects

Analysts have raised their fair value estimate for Carlsberg from DKK 723 to DKK 756, reflecting a more constructive outlook on revenue growth and sector sentiment that aligns with recent Street upgrades and higher external price targets heading into 2026.

Analyst Commentary

The recent upgrade of Carlsberg to Overweight at JPMorgan, alongside a higher price target of DKK 975 from DKK 850, underscores a strengthening long term conviction in the brewer’s ability to execute on its growth strategy and benefit from supportive sector dynamics in tobacco and beer heading into 2026. This more optimistic stance highlights expectations for solid pricing power, improved mix, and operational efficiencies that could sustain margin expansion beyond the near term.

At the same time, the higher fair value estimate to DKK 756 still embeds a degree of prudence around execution risks in key markets, sensitivity to consumer demand in a weaker macro backdrop, and potential volatility in input costs and foreign exchange. The gap between intrinsic value estimates and the most bullish external price targets suggests that while upside remains, it is increasingly contingent on Carlsberg delivering on ambitious top line and margin assumptions over the next two years.

Bearish Takeaways

• Bearish analysts caution that recent share price strength already discounts a substantial portion of the anticipated margin recovery, limiting upside if revenue growth or cost savings rollout underperforms expectations.
• There is concern that slower volume growth in mature European markets could cap operating leverage, making current valuation multiples vulnerable if pricing power weakens or promotional intensity rises.
• Some bearish views focus on execution risks in emerging markets, where currency volatility, regulatory changes and competitive pressure could dilute the earnings contribution implied in more optimistic forecasts.
• Cautious sentiment also reflects the risk that elevated capital allocation toward expansion and brand investment may weigh on free cash flow generation, challenging the sustainability of current valuation premia versus global brewing peers.

Valuation Changes

• The fair value estimate has risen slightly, increasing from DKK 723 to DKK 756, reflecting a modestly more optimistic intrinsic valuation.
• The discount rate has risen slightly from 4.92 percent to 5.08 percent, implying a marginally higher required return and risk assessment.
• Revenue growth has increased slightly, moving from 5.99 percent to 6.14 percent, indicating a small uplift in long term top line expectations.
• The net profit margin has edged down marginally, from 9.16 percent to 9.14 percent, suggesting broadly stable but slightly softer profitability assumptions.
• The future P/E has risen moderately, from 12.0x to 12.9x, which points to a somewhat higher multiple being applied to Carlsberg’s forward earnings.