Sunway Construction Group Berhad Just Beat Revenue Estimates By 32%

A week ago, Sunway Construction Group Berhad (KLSE:SUNCON) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Revenue of RM1.4b beat expectations by 32% and statutory earnings per share (EPS) of RM0.059 exceeded forecasts by 14%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from Sunway Construction Group Berhad's 15 analysts is for revenues of RM5.33b in 2025. This reflects a credible 3.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 18% to RM0.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM5.11b and earnings per share (EPS) of RM0.23 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.

Check out our latest analysis for Sunway Construction Group Berhad

It will come as no surprise to learn that the analysts have increased their price target for Sunway Construction Group Berhad 5.8% to RM6.45on 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. The most optimistic Sunway Construction Group Berhad analyst has a price target of RM7.26 per share, while the most pessimistic values it at RM5.21. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We would highlight that Sunway Construction Group Berhad's revenue growth is expected to slow, with the forecast 5.0% annualised growth rate until the end of 2025 being well below the historical 23% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Sunway Construction Group Berhad.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sunway Construction Group Berhad's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Sunway Construction Group Berhad going out to 2027, and you can see them free on our platform here..

You can also see our analysis of Sunway Construction Group Berhad's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.