Downgrade: Here's How This Analyst Sees Pecca Group Berhad (KLSE:PECCA) Performing In The Near Term

Market forces rained on the parade of Pecca Group Berhad (KLSE:PECCA) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

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Following the downgrade, the current consensus from Pecca Group Berhad's lone analyst is for revenues of RM251m in 2026 which - if met - would reflect a decent 12% increase on its sales over the past 12 months. Statutory earnings per share are presumed to increase 4.3% to RM0.083. Previously, the analyst had been modelling revenues of RM284m and earnings per share (EPS) of RM0.095 in 2026. Indeed, we can see that the analyst is a lot more bearish about Pecca Group Berhad's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Pecca Group Berhad

The consensus price target fell 8.3% to RM1.54, with the weaker earnings outlook clearly leading analyst valuation estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Pecca Group Berhad's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. Compare this to the 14 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it looks like Pecca Group Berhad is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Pecca Group Berhad. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Pecca Group Berhad.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.