Analysts Have Just Cut Their Kimlun Corporation Berhad (KLSE:KIMLUN) Revenue Estimates By 12%

Market forces rained on the parade of Kimlun Corporation Berhad (KLSE:KIMLUN) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After this downgrade, Kimlun Corporation Berhad's five analysts are now forecasting revenues of RM910m in 2021. This would be a decent 20% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of RM1.0b in 2021. It looks like forecasts have become a fair bit less optimistic on Kimlun Corporation Berhad, given the substantial drop in revenue estimates.

See our latest analysis for Kimlun Corporation Berhad

The consensus price target fell 9.3% to RM1.06, with the analysts clearly less optimistic about Kimlun Corporation Berhad's valuation following this update. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Kimlun Corporation Berhad, with the most bullish analyst valuing it at RM1.40 and the most bearish at RM0.78 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.

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. The analysts are definitely expecting Kimlun Corporation Berhad's growth to accelerate, with the forecast 20% annualised growth to the end of 2021 ranking favourably alongside historical growth of 1.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kimlun Corporation Berhad is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Kimlun Corporation Berhad's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Kimlun Corporation Berhad after today.

That said, the analysts might have good reason to be negative on Kimlun Corporation Berhad, given its declining profit margins. Learn more, and discover the 3 other flags we've identified, for 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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