Genting Berhad Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now




  • In Business
  • 2022-11-27 00:31:38Z
  • By Simply Wall St.
 

Genting Berhad (KLSE:GENTING) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with RM6.1b revenue coming in 4.3% lower than what the analystsexpected. Statutory earnings per share (EPS) of RM0.033 missed the mark badly, arriving some 53% below what was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Genting Berhad

Taking into account the latest results, the current consensus from Genting Berhad's 16 analysts is for revenues of RM25.1b in 2023, which would reflect a major 20% increase on its sales over the past 12 months. Genting Berhad is also expected to turn profitable, with statutory earnings of RM0.37 per share. In the lead-up to this report, the analysts had been modelling revenues of RM25.0b and earnings per share (EPS) of RM0.39 in 2023. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at RM5.89, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 Genting Berhad at RM7.35 per share, while the most bearish prices it at RM4.60. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Genting Berhad's past performance and to peers in the same industry. For example, we noticed that Genting Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 16% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 8.5% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 12% annually. So it looks like Genting Berhad is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Genting Berhad. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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 Genting Berhad. 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 Genting Berhad going out to 2024, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Genting Berhad .

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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