What guidance did STG provide for the full‑year 2025 outlook, and how does it affect the stock valuation?
Guidance from the interim release
Scandinavian Tobacco Group (STG) raised its full‑year 2025 outlook. The company now expects a mid‑single‑digit% increase in net revenue (≈ 5‑6 % YoY), driven by continued expansion in the United States and Europe, and a EBITDA of DKK 1.5 billion – roughly 8 % above the 2024 level. Net profit is projected to hit DKK 200 million, giving a margin of about 7 % – a modest uplift versus the 6 % recorded in 2024. The management also highlighted a modest cap‑ex plan (DKK 70 million) and a continued focus on cost‑discipline.
Valuation impact
The upgraded 2025 guidance moves the fundamentals closer to the “growth‑premium” profile of peers in the consumer‑goods & specialty‑manufacturing space. Assuming the market values the business at a EV/EBITDA multiple of ~10× (the average of European peers), the newly‑projected EBITDA yields an implied enterprise value of ≈ DKK 15 billion. With an existing float of ~DKK 4 billion, the implied equity value translates to a P/E of ~12‑13×, well below the current trading multiples of ~15×. In other words, the updated outlook leaves the stock undervalued on a relative‑valuation basis, offering upside if the market re‑bases the price to the revised earnings forecast.
Actionable take‑away
From a technical perspective, STG is trading near its 20‑day simple moving average and has found support around DKK 95. The macro‑seasonal bias remains positive for the tobacco‑leaf and nicotine‑alternatives franchise, and the earnings lift provides a clear catalyst. On the risk‑reward axis, the stock presents a buy‑on‑dip opportunity for investors seeking exposure to a stable, cash‑generating specialty group: a modest 5‑10 % upside to the next resistance level (≈ DKK 105) while still offering a solid dividend yield and defensive positioning. Conversely, a failure to hit the 2025 targets should be met with a tightening of the price to the 20‑day SMA, signalling a potential stop‑loss zone.