P.I.E. Industrial Berhad (KLSE:PIE) Analysts Are More Bearish Than They Used To Be

Today is shaping up negative for P.I.E. Industrial Berhad (KLSE:PIE) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. At RM5.75, shares are up 6.5% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following this downgrade, P.I.E. Industrial Berhad's two analysts are forecasting 2024 revenues to be RM1.0b, approximately in line with the last 12 months. Per-share earnings are expected to increase 7.9% to RM0.18. Before this latest update, the analysts had been forecasting revenues of RM1.2b and earnings per share (EPS) of RM0.21 in 2024. Indeed, we can see that the analysts are a lot more bearish about P.I.E. Industrial Berhad's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

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

Despite the cuts to forecast earnings, there was no real change to the RM6.69 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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 0.1% by the end of 2024. This indicates a significant reduction from annual growth of 13% 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 29% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - P.I.E. Industrial Berhad is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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 P.I.E. Industrial Berhad after the downgrade.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for P.I.E. Industrial Berhad going out as far as 2026, and you can see them 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.