Industry Analysts Just Made A Meaningful Upgrade To Their P.I.E. Industrial Berhad (KLSE:PIE) Revenue Forecasts

P.I.E. Industrial Berhad (KLSE:PIE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that P.I.E. Industrial Berhad will make substantially more sales than they'd previously expected.

Following the upgrade, the consensus from twin analysts covering P.I.E. Industrial Berhad is for revenues of RM572m in 2020, implying a discernible 4.7% decline in sales compared to the last 12 months. Per-share earnings are expected to jump 23% to RM0.069. Previously, the analysts had been modelling revenues of RM505m and earnings per share (EPS) of RM0.064 in 2020. The forecasts seem more optimistic now, with a substantial gain in revenue and a small lift in earnings per share estimates.

View our latest analysis for P.I.E. Industrial Berhad

With these upgrades, we're not surprised to see that the analysts have lifted their price target 33% to RM1.76 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values P.I.E. Industrial Berhad at RM2.32 per share, while the most bearish prices it at RM1.20. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Over the past five years, revenues have declined around 0.2% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for a 4.7% decline in revenue next year. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 30% next year. So while a broad number of companies are forecast to grow, unfortunately P.I.E. Industrial Berhad is expected to see its sales affected worse than other companies in the 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 an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at P.I.E. Industrial Berhad.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2022, which can be seen for 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. 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.
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