Revenue Beat: Sunway Construction Group Berhad Beat Analyst Estimates By 13%

A week ago, Sunway Construction Group Berhad (KLSE:SUNCON) came out with a strong set of yearly numbers that could potentially lead to a re-rate of the stock. It was a positive result, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 13% higher than the analysts had forecast, at RM3.5b, while EPS of RM0.14 beat analyst models by 8.9%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Sunway Construction Group Berhad

Taking into account the latest results, the consensus forecast from Sunway Construction Group Berhad's 16 analysts is for revenues of RM4.60b in 2025. This reflects a major 30% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 48% to RM0.21. In the lead-up to this report, the analysts had been modelling revenues of RM4.47b and earnings per share (EPS) of RM0.21 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

It will come as no surprise to learn that the analysts have increased their price target for Sunway Construction Group Berhad 6.3% to RM4.75on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Sunway Construction Group Berhad, with the most bullish analyst valuing it at RM5.70 and the most bearish at RM2.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sunway Construction Group Berhad's past performance and to peers in the same industry. The analysts are definitely expecting Sunway Construction Group Berhad's growth to accelerate, with the forecast 30% annualised growth to the end of 2025 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sunway Construction Group Berhad to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sunway Construction Group Berhad following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Sunway Construction Group Berhad. Long-term earnings power is much more important than next year's profits. We have forecasts for Sunway Construction Group Berhad going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Sunway Construction Group Berhad you should know about.

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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.