One KKB Engineering Berhad (KLSE:KKB) Analyst Has Been Cutting Their Forecasts

The latest analyst coverage could presage a bad day for KKB Engineering Berhad (KLSE:KKB), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

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Following the downgrade, the consensus from sole analyst covering KKB Engineering Berhad is for revenues of RM411m in 2025, implying a disturbing 22% decline in sales compared to the last 12 months. Prior to the latest estimates, the analyst was forecasting revenues of RM535m in 2025. The consensus view seems to have become more pessimistic on KKB Engineering Berhad, noting the pretty serious reduction to revenue estimates in this update.

See our latest analysis for KKB Engineering Berhad

Notably, the analyst has cut their price target 9.8% to RM1.65, suggesting concerns around KKB Engineering Berhad's valuation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 22% by the end of 2025. This indicates a significant reduction from annual growth of 4.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - KKB Engineering Berhad is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of KKB Engineering Berhad going forwards.

As you can see, this broker clearly isn't bullish, and there might be good reason for that. We've identified some potential issues with KKB Engineering Berhad's financials, such as the risk of cutting its dividend. Learn more, and discover the 1 other risk 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 with high insider ownership.

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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.