CAG Group AB (publ) Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

CAG Group AB (publ) (STO:CAG) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 3.3% to hit kr229m. CAG Group also reported a statutory profit of kr1.88, which was an impressive 34% above what the analysts had forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CAG Group after the latest results.

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Following last week's earnings report, CAG Group's two analysts are forecasting 2025 revenues to be kr869.0m, approximately in line with the last 12 months. Statutory earnings per share are predicted to expand 13% to kr7.46. Before this earnings report, the analysts had been forecasting revenues of kr867.0m and earnings per share (EPS) of kr7.17 in 2025. So the consensus seems to have become somewhat more optimistic on CAG Group's earnings potential following these results.

Check out our latest analysis for CAG Group

The consensus price target was unchanged at kr111, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CAG Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that CAG Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.4% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.8% annually. 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around CAG Group's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at kr111, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign 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.