Need To Know: Analysts Just Made A Substantial Cut To Their TRC Synergy Berhad (KLSE:TRC) Estimates

Today is shaping up negative for TRC Synergy Berhad (KLSE:TRC) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. Bidders are definitely seeing a different story, with the stock price of RM0.39 reflecting a 15% rise in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

Following the latest downgrade, the two analysts covering TRC Synergy Berhad provided consensus estimates of RM616m revenue in 2023, which would reflect an uncomfortable 13% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to plummet 74% to RM0.03 in the same period. Before this latest update, the analysts had been forecasting revenues of RM688m and earnings per share (EPS) of RM0.037 in 2023. Indeed, we can see that the analysts are a lot more bearish about TRC Synergy Berhad's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for TRC Synergy Berhad

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. One more thing stood out to us about these estimates, and it's the idea that TRC Synergy Berhad's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 13% to the end of 2023. This tops off a historical decline of 1.5% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 17% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect TRC Synergy Berhad to suffer worse than 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 wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on TRC Synergy Berhad, and their negativity could be grounds for caution.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, 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. 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.