Scandinavian Tobacco Group A/S (CPH:STG): What Does The Future Look Like?

The most recent earnings release Scandinavian Tobacco Group A/S's (CPSE:STG) announced in December 2017 indicated that the business benefited from a slight tailwind, eventuating to a single-digit earnings growth of 4.48%. Below, I've laid out key growth figures on how market analysts predict Scandinavian Tobacco Group's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. See our latest analysis for Scandinavian Tobacco Group

Market analysts' consensus outlook for the coming year seems rather muted, with earnings growing by a single digit 2.20%. The following year doesn't look much more exciting, though earnings does reach Ø820.98M in 2021.

While it’s useful to understand the rate of growth each year relative to today’s figure, it may be more beneficial determining the rate at which the business is growing every year, on average. The benefit of this method is that we can get a bigger picture of the direction of Scandinavian Tobacco Group's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 4.41%. This means that, we can anticipate Scandinavian Tobacco Group will grow its earnings by 4.41% every year for the next few years.

Next Steps:

For Scandinavian Tobacco Group, I've put together three relevant factors you should further examine:

1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is STG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether STG is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of STG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.