The Scandinavian Tobacco Group A/S (CPH:STG) Second-Quarter Results Are Out And Analysts Have Published New Forecasts

Investors in Scandinavian Tobacco Group A/S (CPH:STG) had a good week, as its shares rose 5.7% to close at kr.108 following the release of its second-quarter results. Results overall were respectable, with statutory earnings of kr.13.60 per share roughly in line with what the analysts had forecast. Revenues of kr.2.4b came in 2.2% ahead of analyst predictions. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Scandinavian Tobacco Group

Taking into account the latest results, the consensus forecast from Scandinavian Tobacco Group's three analysts is for revenues of kr.9.10b in 2024. This reflects a satisfactory 2.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to dip 5.0% to kr.12.25 in the same period. In the lead-up to this report, the analysts had been modelling revenues of kr.8.97b and earnings per share (EPS) of kr.12.04 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of kr.109, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values Scandinavian Tobacco Group at kr.115 per share, while the most bearish prices it at kr.102. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Scandinavian Tobacco Group's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Scandinavian Tobacco Group'shistorical trends, as the 5.5% annualised revenue growth to the end of 2024 is roughly in line with the 5.3% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.4% per year. So although Scandinavian Tobacco Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at kr.109, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Scandinavian Tobacco Group going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Scandinavian Tobacco Group 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.