Here's What Analysts Are Forecasting For Raffles Medical Group Ltd After Its Yearly Results
Last week saw the newest full-year earnings release from Raffles Medical Group Ltd (SGX:BSL), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of S$522m and statutory earnings per share of S$0.033. Following the result, 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. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
See our latest analysis for Raffles Medical Group
Taking into account the latest results, the latest consensus from Raffles Medical Group's ten analysts is for revenues of S$558.5m in 2020, which would reflect a satisfactory 7.0% improvement in sales compared to the last 12 months. Statutory per-share earnings are expected to be S$0.033, roughly flat on the last 12 months. In the lead-up to this report, analysts had been modelling revenues of S$609.9m and earnings per share (EPS) of S$0.033 in 2020. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The consensus has reconfirmed its price target of S$1.09, showing that analysts don't expect weaker sales expectations next year to have a material impact on Raffles Medical Group's market value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Raffles Medical Group, with the most bullish analyst valuing it at S$1.21 and the most bearish at S$0.96 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Raffles Medical Group's past performance and to peers in the same market. We can infer from the latest estimates that analysts are expecting a continuation of Raffles Medical Group's historical trends, as next year's forecast 7.0% revenue growth is roughly in line with 5.9% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.7% per year. So although Raffles Medical Group is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at S$1.09, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Raffles Medical Group analysts - going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Raffles Medical Group's balance sheet, and whether we think Raffles Medical Group is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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