Shareholders might have noticed that Genting Malaysia Berhad (KLSE:GENM) filed its quarterly result this time last week. The early response was not positive, with shares down 2.6% to RM2.64 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 6.0%to hit RM2.3b. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 18 analysts covering Genting Malaysia Berhad are now predicting revenues of RM10.6b in 2023. If met, this would reflect a huge 31% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 2,182% to RM0.19. In the lead-up to this report, the analysts had been modelling revenues of RM10.7b and earnings per share (EPS) of RM0.21 in 2023. The 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 numbers for next year.
The consensus price target held steady at RM3.51, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Genting Malaysia Berhad, with the most bullish analyst valuing it at RM4.70 and the most bearish at RM2.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Genting Malaysia Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 24% annualised growth until the end of 2023. If achieved, this would be a much better result than the 16% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 12% per year. So it looks like Genting Malaysia Berhad is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at RM3.51, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Genting Malaysia Berhad analysts - going out to 2024, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for Genting Malaysia Berhad (of which 1 is significant!) you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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