Results: Hong Leong Bank Berhad Exceeded Expectations And The Consensus Has Updated Its Estimates

Hong Leong Bank Berhad (KLSE:HLBANK) just released its latest second-quarter results and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 4.8% to hit RM1.6b. Statutory earnings per share (EPS) came in at RM0.56, some 6.4% above whatthe analysts had expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Hong Leong Bank Berhad

After the latest results, the 15 analysts covering Hong Leong Bank Berhad are now predicting revenues of RM6.34b in 2025. If met, this would reflect a satisfactory 2.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 2.2% to RM2.15. In the lead-up to this report, the analysts had been modelling revenues of RM6.31b and earnings per share (EPS) of RM2.16 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of RM25.41, showing that the business is executing well and in line with expectations. 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. There are some variant perceptions on Hong Leong Bank Berhad, with the most bullish analyst valuing it at RM31.40 and the most bearish at RM23.20 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. It's pretty clear that there is an expectation that Hong Leong Bank Berhad's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.9% growth on an annualised basis. This is compared to a historical growth rate of 6.7% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Hong Leong Bank Berhad.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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.

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 forecasts for Hong Leong Bank Berhad going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Hong Leong Bank Berhad that you need to be mindful of.

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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.