Analysts Just Shaved Their Malaysian Resources Corporation Berhad (KLSE:MRCB) Forecasts Dramatically

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

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After this downgrade, Malaysian Resources Corporation Berhad's five analysts are now forecasting revenues of RM1.8b in 2025. This would be a sizeable 41% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 35% to RM0.01. Before this latest update, the analysts had been forecasting revenues of RM2.1b and earnings per share (EPS) of RM0.011 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.

View our latest analysis for Malaysian Resources Corporation Berhad

Despite the cuts to forecast earnings, there was no real change to the RM0.57 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Malaysian Resources Corporation Berhad's growth to accelerate, with the forecast 41% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Malaysian Resources Corporation Berhad to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Malaysian Resources Corporation Berhad. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Malaysian Resources Corporation Berhad after the downgrade.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Malaysian Resources Corporation Berhad, including its declining profit margins. Learn more, and discover the 2 other concerns 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.