Earnings Update: Here's Why Analysts Just Lifted Their Axfood AB (publ) (STO:AXFO) Price Target To kr276

Last week saw the newest quarterly earnings release from Axfood AB (publ) (STO:AXFO), an important milestone in the company's journey to build a stronger business. It looks like the results were a bit of a negative overall. While revenues of kr23b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.6% to hit kr2.83 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the current consensus from Axfood's five analysts is for revenues of kr89.4b in 2025. This would reflect a modest 3.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to swell 15% to kr11.32. In the lead-up to this report, the analysts had been modelling revenues of kr89.5b and earnings per share (EPS) of kr11.23 in 2025. 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.

See our latest analysis for Axfood

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.9% to kr276. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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 kr290 and the most bearish at kr250 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. 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 6.1% 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 4.7% annually. Even after the forecast slowdown in growth, it seems obvious that Axfood is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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. 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 Axfood going out to 2027, 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.