CAG Group AB (publ) Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a good week for CAG Group AB (publ) (STO:CAG) shareholders, because the company has just released its latest full-year results, and the shares gained 4.1% to kr86.20. Revenues were in line with forecasts, at kr653m, although statutory earnings per share came in 11% below what the analyst expected, at kr4.32 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

View our latest analysis for CAG Group

Taking into account the latest results, the consensus forecast from CAG Group's lone analyst is for revenues of kr695.0m in 2022, which would reflect a modest 6.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 38% to kr5.94. Before this earnings report, the analyst had been forecasting revenues of kr693.0m and earnings per share (EPS) of kr5.93 in 2022. The consensus analyst doesn'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 consensus price target rose 12% to kr101despite there being no meaningful change to earnings estimates. It could be that the analystare reflecting the predictability of CAG Group's earnings by assigning a price premium.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that CAG Group's revenue growth is expected to slow, with the forecast 6.4% annualised growth rate until the end of 2022 being well below the historical 10% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% 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 CAG Group.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analyst reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on CAG Group. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for CAG Group that you should be aware of.

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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.