Analysts Have Been Trimming Their Sapura Energy Berhad (KLSE:SAPNRG) Price Target After Its Latest Report
It's been a pretty great week for Sapura Energy Berhad (KLSE:SAPNRG) shareholders, with its shares surging 11% to RM0.05 in the week since its latest full-year results. The results don't look great, especially considering that statutory losses grew 40% toRM0.032 per share. Revenues of RM4.3b did beat expectations by 2.1%, but it looks like a bit of a cold comfort. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Sapura Energy Berhad
Taking into account the latest results, Sapura Energy Berhad's three analysts currently expect revenues in 2025 to be RM4.28b, approximately in line with the last 12 months. The loss per share is expected to ameliorate slightly, reducing to RM0.025. Before this latest report, the consensus had been expecting revenues of RM3.99b and RM0.022 per share in losses. So it's pretty clear the analysts have mixed opinions on Sapura Energy Berhad even after this update; although they upped their revenue numbers, it came at the cost of a noticeable increase in per-share losses.
Spiting the revenue upgrading, the average price target fell 6.9% to RM0.034, clearly signalling that higher forecast losses are a valuation concern. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Sapura Energy Berhad analyst has a price target of RM0.06 per share, while the most pessimistic values it at RM0.02. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2025. That would be a definite improvement, given that the past five years have seen revenue shrink 8.0% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 5.6% per year. Not only are Sapura Energy Berhad's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sapura Energy Berhad's future valuation.
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 Sapura Energy Berhad analysts - going out to 2027, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 4 warning signs for Sapura Energy Berhad (of which 2 are concerning!) you should know about.
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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.
