What You Need To Know About The AME Elite Consortium Berhad (KLSE:AME) Analyst Downgrade Today

One thing we could say about the analysts on AME Elite Consortium Berhad (KLSE:AME) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the four analysts covering AME Elite Consortium Berhad are now predicting revenues of RM566m in 2023. If met, this would reflect a sizeable 42% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 40% to RM0.11. Previously, the analysts had been modelling revenues of RM635m and earnings per share (EPS) of RM0.11 in 2023. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

See our latest analysis for AME Elite Consortium Berhad

Analysts made no major changes to their price target of RM1.78, suggesting the downgrades are not expected to have a long-term impact on AME Elite Consortium Berhad's valuation. 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 AME Elite Consortium Berhad analyst has a price target of RM2.10 per share, while the most pessimistic values it at RM1.63. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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 clear from the latest estimates that AME Elite Consortium Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 42% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 7.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that AME Elite Consortium Berhad is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for AME Elite Consortium Berhad. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on AME Elite Consortium Berhad after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for AME Elite Consortium Berhad going out to 2025, 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 downgrading 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. 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.