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MISC Berhad Beat Revenue Forecasts By 5.4%: Here's What Analysts Are Forecasting Next

Last week saw the newest annual earnings release from MISC Berhad (KLSE:MISC), an important milestone in the company's journey to build a stronger business. It was a pretty mixed result, with revenues beating expectations to hit RM14b. Statutory earnings fell 3.9% short of analyst forecasts, reaching RM0.48 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on MISC Berhad after the latest results.

Check out our latest analysis for MISC Berhad

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Taking into account the latest results, the 14 analysts covering MISC Berhad provided consensus estimates of RM13.4b revenue in 2024, which would reflect a perceptible 6.1% decline over the past 12 months. Statutory earnings per share are predicted to expand 10% to RM0.52. Before this earnings report, the analysts had been forecasting revenues of RM13.0b and earnings per share (EPS) of RM0.51 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of RM8.35, suggesting that the forecast performance does not have a long term impact on the company's 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 MISC Berhad at RM10.10 per share, while the most bearish prices it at RM7.10. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 6.1% annualised decline to the end of 2024. That is a notable change from historical growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 2.3% annually for the foreseeable future. So it's pretty clear that MISC Berhad's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards MISC Berhad following these results. They also upgraded their estimates, with revenue apparently performing well, although it is expected to lag the wider industry this year. 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 MISC Berhad. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple MISC Berhad analysts - going out to 2026, and you can see them free on our platform here.

You can also view our analysis of MISC Berhad's balance sheet, and whether we think MISC Berhad is carrying too much debt, for free on our platform here.

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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