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On Friday, RBC Capital analysts upgraded Carlsberg (CSE:CARLb) A/S stock from Sector Perform to Outperform, setting a new price target of DKK 1,020, up from the previous DKK 890. The analysts cited several factors for the positive reassessment of the Danish brewer’s outlook. According to InvestingPro data, Carlsberg has maintained dividend payments for 25 consecutive years and operates with a moderate debt level, demonstrating strong financial stability.
In their statement, RBC Capital analysts highlighted the company’s effective management of expectations, a generally positive outlook on the beer industry, and Carlsberg’s lack of exposure to the United States market, which mitigates the risk of potential tariffs. These elements contributed to the analysts’ decision to upgrade the stock rating. As a prominent player in the Beverages industry, InvestingPro analysis shows the company is trading at an attractive P/E ratio relative to its near-term earnings growth potential, with analysts forecasting continued sales growth.
The upgrade also comes with a decrease in the cost of equity assumption for Carlsberg, which RBC Capital now sets at 8.0%, reduced from the previous 8.5%. This adjustment aligns Carlsberg’s cost of equity with that of its industry peers. The analysts noted that the increase in the cost of equity had been a response to Carlsberg’s acquisition of Britvic (LON:BVIC), but it has since been revised.
RBC Capital’s new price target of DKK 1,020 for Carlsberg reflects an increase from the earlier target of DKK 890. This revision is a direct result of the lowered cost of equity and the firm’s confidence in Carlsberg’s strategic positioning within the beer market.
Carlsberg A/S, known for its global presence and extensive portfolio of beer and other beverage brands, has been operating without the direct risks associated with the US market, which can be subject to trade uncertainties and tariffs. This absence of exposure is seen as a strategic advantage by RBC Capital analysts in the current economic climate. The company has demonstrated strong performance over the last three months, and InvestingPro subscribers can access additional insights, including 8 more ProTips and a comprehensive analysis of the company’s market position and growth prospects.
In other recent news, Carlsberg’s financial results and analyst ratings have drawn attention from investors. Carlsberg’s revenue for 2024 was reported at DKK75.01 billion, closely aligning with the consensus estimate of DKK74.97 billion. The company experienced a slight organic growth of 2.4%, driven mainly by a 2.0% increase in pricing and a modest 0.4% rise in volume. Despite a 1.0% decrease in beer volumes in China, Carlsberg expanded its market share by approximately 30 basis points. Carlsberg’s organic operating profit grew by 6.0% in 2024, reaching the higher end of the forecasted range of 4%-6%. Looking forward, Carlsberg anticipates organic operating profit growth ranging from 1% to 5% for 2025, though the loss of the San Miguel brand in the U.K. is expected to impact profit growth negatively. The integration of Britvic is also seen as potentially margin-dilutive in the short term. CFRA analyst Danny Yeo Sze Wai has maintained a Buy rating and a DKK1,000 price target for Carlsberg, noting the company’s strong performance and future earnings potential. Yeo adjusted the earnings per share estimate for 2025 to DKK64.90, up from the previous DKK61.30.
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