Industry Analysts Just Upgraded Their AFFIN Bank Berhad (KLSE:AFFIN) Revenue Forecasts By 11%

Shareholders in AFFIN Bank Berhad (KLSE:AFFIN) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

After this upgrade, AFFIN Bank Berhad's eight analysts are now forecasting revenues of RM2.3b in 2020. This would be a decent 9.5% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to rise 9.5% to RM0.19. Before this latest update, the analysts had been forecasting revenues of RM2.1b and earnings per share (EPS) of RM0.19 in 2020. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

Check out our latest analysis for AFFIN Bank Berhad

Even though revenue forecasts increased, there was no change to the consensus price target of RM1.53, suggesting the analysts are focused on earnings as the driver of value creation. 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 AFFIN Bank Berhad analyst has a price target of RM1.80 per share, while the most pessimistic values it at RM1.30. This shows there is still some 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.

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. We would highlight that AFFIN Bank Berhad's revenue growth is expected to slow, with forecast 9.5% increase next year well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% next year. So it's pretty clear that, while AFFIN Bank Berhad's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion from this consensus update 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at AFFIN Bank Berhad.

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 AFFIN Bank Berhad analysts - going out to 2022, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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. 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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