kr.133 - That's What Analysts Think Scandinavian Tobacco Group A/S (CPH:STG) Is Worth After These Results

Last week, you might have seen that Scandinavian Tobacco Group A/S (CPH:STG) released its annual result to the market. The early response was not positive, with shares down 7.7% to kr.117 in the past week. It was a credible result overall, with revenues of kr.8.7b and statutory earnings per share of kr.13.60 both in line with analyst estimates, showing that Scandinavian Tobacco Group is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Scandinavian Tobacco Group

Following last week's earnings report, Scandinavian Tobacco Group's three analysts are forecasting 2024 revenues to be kr.8.85b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 2.5% to kr.14.17. Before this earnings report, the analysts had been forecasting revenues of kr.8.76b and earnings per share (EPS) of kr.14.28 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 6.0% to kr.133despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Scandinavian Tobacco Group's earnings by assigning a price premium. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Scandinavian Tobacco Group, with the most bullish analyst valuing it at kr.135 and the most bearish at kr.130 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Scandinavian Tobacco Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.3% growth on an annualised basis. This is compared to a historical growth rate of 6.0% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Scandinavian Tobacco Group.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Scandinavian Tobacco Group going out to 2026, and you can see them free on our platform here.

Even so, be aware that Scandinavian Tobacco Group is showing 1 warning sign in our investment analysis , you should know about...

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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.