Scandinavian Tobacco Group A/S Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
It's been a good week for Scandinavian Tobacco Group A/S (CPH:STG) shareholders, because the company has just released its latest quarterly results, and the shares gained 9.1% to kr.76.60. It looks like a credible result overall - although revenues of kr.2.3b were what the analysts expected, Scandinavian Tobacco Group surprised by delivering a (statutory) profit of kr.2.80 per share, an impressive 24% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following last week's earnings report, Scandinavian Tobacco Group's three analysts are forecasting 2026 revenues to be kr.8.84b, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 15% to kr.7.00 in the same period. In the lead-up to this report, the analysts had been modelling revenues of kr.8.87b and earnings per share (EPS) of kr.6.77 in 2026. So the consensus seems to have become somewhat more optimistic on Scandinavian Tobacco Group's earnings potential following these results.
View our latest analysis for Scandinavian Tobacco Group
The consensus price target rose 7.1% to kr.82.50, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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.90.00 per share, while the most bearish prices it at kr.75.00. 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.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.3% by the end of 2026. This indicates a significant reduction from annual growth of 2.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.6% per year. It's pretty clear that Scandinavian Tobacco Group's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Scandinavian Tobacco 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. 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. At Simply Wall St, we have a full range of analyst estimates for Scandinavian Tobacco Group going out to 2028, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 3 warning signs for Scandinavian Tobacco Group (1 is a bit unpleasant!) that you need to be mindful 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.