One KKB Engineering Berhad (KLSE:KKB) Analyst Just Cut Their EPS Forecasts

Market forces rained on the parade of KKB Engineering Berhad (KLSE:KKB) shareholders today, when the covering analyst downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

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Following the downgrade, the consensus from solitary analyst covering KKB Engineering Berhad is for revenues of RM362m in 2025, implying a perceptible 3.7% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to reduce 5.9% to RM0.06 in the same period. Before this latest update, the analyst had been forecasting revenues of RM411m and earnings per share (EPS) of RM0.07 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.

See our latest analysis for KKB Engineering Berhad

The consensus price target fell 11% to RM1.47, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 3.7% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 6.1% 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 16% per year. 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 biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for KKB Engineering Berhad. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of KKB Engineering Berhad.

As you can see, this analyst 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 warning sign 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.