Earnings Update: DKSH Holdings (Malaysia) Berhad (KLSE:DKSH) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

Last week saw the newest full-year earnings release from DKSH Holdings (Malaysia) Berhad (KLSE:DKSH), an important milestone in the company's journey to build a stronger business. Results look mixed - while revenue fell marginally short of analyst estimates at RM6.4b, statutory earnings beat expectations 4.0%, with DKSH Holdings (Malaysia) Berhad reporting profits of RM0.30 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for DKSH Holdings (Malaysia) Berhad

Taking into account the latest results, the consensus forecast from DKSH Holdings (Malaysia) Berhad's two analysts is for revenues of RM6.89b in 2021, which would reflect a decent 8.5% improvement in sales compared to the last 12 months. Per-share earnings are expected to step up 19% to RM0.36. Before this earnings report, the analysts had been forecasting revenues of RM6.89b and earnings per share (EPS) of RM0.34 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of RM3.88, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.

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. It's clear from the latest estimates that DKSH Holdings (Malaysia) Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 8.5% revenue growth noticeably faster than its historical growth of 4.7%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.3% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that DKSH Holdings (Malaysia) Berhad is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around DKSH Holdings (Malaysia) Berhad's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at RM3.88, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for DKSH Holdings (Malaysia) Berhad going out as far as 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for DKSH Holdings (Malaysia) Berhad that you should be aware of.

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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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