Earnings Miss: Axfood AB (publ) Missed EPS By 9.0% And Analysts Are Revising Their Forecasts

It's been a sad week for Axfood AB (publ) (STO:AXFO), who've watched their investment drop 15% to kr237 in the week since the company reported its quarterly result. It looks like the results were a bit of a negative overall. While revenues of kr21b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.0% to hit kr3.25 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Axfood

Taking into account the latest results, the consensus forecast from Axfood's five analysts is for revenues of kr88.7b in 2025. This reflects a modest 6.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 11% to kr12.16. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr87.4b and earnings per share (EPS) of kr12.82 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target fell 8.6% to kr258, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Axfood, with the most bullish analyst valuing it at kr300 and the most bearish at kr225 per share. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Axfood's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.5% growth on an annualised basis. This is compared to a historical growth rate of 12% 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 4.3% annually. So it's pretty clear that, while Axfood's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Axfood going out to 2026, and you can see them free on our platform here..

You can also see whether Axfood is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.