Broker Revenue Forecasts For Kelington Group Berhad (KLSE:KGB) Are Surging Higher

Kelington Group Berhad (KLSE:KGB) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following the upgrade, the consensus from four analysts covering Kelington Group Berhad is for revenues of RM1.3b in 2023, implying a chunky 12% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to fall 20% to RM0.086 in the same period. Before this latest update, the analysts had been forecasting revenues of RM1.2b and earnings per share (EPS) of RM0.079 in 2023. The most recent forecasts are noticeably more optimistic, with a substantial gain in revenue estimates and a lift to earnings per share as well.

View our latest analysis for Kelington Group Berhad

With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to RM1.91 per share.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 12% by the end of 2023. This indicates a significant reduction from annual growth of 33% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kelington Group Berhad is expected to lag the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Kelington Group 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 Kelington Group Berhad analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.