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Here's What Analysts Are Forecasting For Axfood AB (publ) After Its Annual Results

Last week, you might have seen that Axfood AB (publ) (STO:AXFO) released its yearly result to the market. The early response was not positive, with shares down 2.3% to kr195 in the past week. It was a credible result overall, with revenues of kr51b and statutory earnings per share of kr7.85 both in line with analyst estimates, showing that Axfood is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are 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 analysts' statutory forecasts suggest is in store for next year.

Check out our latest analysis for Axfood

OM:AXFO Past and Future Earnings, February 10th 2020
OM:AXFO Past and Future Earnings, February 10th 2020

Taking into account the latest results, the current consensus from Axfood's three analysts is for revenues of kr52.5b in 2020, which would reflect a reasonable 3.5% increase on its sales over the past 12 months. Statutory per-share earnings are expected to be kr7.95, roughly flat on the last 12 months. In the lead-up to this report, analysts had been modelling revenues of kr52.5b and earnings per share (EPS) of kr8.13 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share forecasts for next year.

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The consensus price target held steady at kr168, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 kr190 and the most bearish at kr145 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

In addition, we can look to Axfood's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect Axfood's revenue growth will slow down substantially, with revenues next year expected to grow 3.5%, compared to a historical growth rate of 5.3% over the past five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 3.5% per year. So it's pretty clear that, while Axfood's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Axfood. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Axfood going out to 2022, and you can see them free on our platform here..

We also provide an overview of the Axfood Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.