Stock Analysis

New Forecasts: Here's What Analysts Think The Future Holds For CB Industrial Product Holding Berhad (KLSE:CBIP)

KLSE:CBIP
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CB Industrial Product Holding Berhad (KLSE:CBIP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

After this upgrade, CB Industrial Product Holding Berhad's dual analysts are now forecasting revenues of RM677m in 2022. This would be a decent 10% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to accumulate 3.6% to RM0.19. Before this latest update, the analysts had been forecasting revenues of RM549m and earnings per share (EPS) of RM0.15 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for CB Industrial Product Holding Berhad

earnings-and-revenue-growth
KLSE:CBIP Earnings and Revenue Growth March 1st 2022

It will come as no surprise to learn that the analysts have increased their price target for CB Industrial Product Holding Berhad 11% to RM1.42 on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values CB Industrial Product Holding Berhad at RM1.43 per share, while the most bearish prices it at RM1.40. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting CB Industrial Product Holding Berhad is an easy business to forecast or the underlying assumptions are obvious.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that CB Industrial Product Holding Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 10% annualised growth until the end of 2022. If achieved, this would be a much better result than the 3.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 17% per year. So although CB Industrial Product Holding Berhad's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at CB Industrial Product Holding Berhad.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for CB Industrial Product Holding Berhad going out as far as 2024, 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. 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.