Newsflash: TRC Synergy Berhad (KLSE:TRC) Analysts Have Been Trimming Their Revenue Forecasts

One thing we could say about the analysts on TRC Synergy Berhad (KLSE:TRC) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the two analysts covering TRC Synergy Berhad, is for revenues of RM551m in 2024, which would reflect a considerable 19% reduction in TRC Synergy Berhad's sales over the past 12 months. Statutory earnings per share are supposed to dive 35% to RM0.035 in the same period. Previously, the analysts had been modelling revenues of RM635m and earnings per share (EPS) of RM0.037 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

Check out our latest analysis for TRC Synergy Berhad

It'll come as no surprise then, to learn that the analysts have cut their price target 5.4% to RM0.53.

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 2.8% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 19% decline in revenue until the end of 2024. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 9.2% 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that TRC Synergy Berhad's revenues are expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of TRC Synergy Berhad going forwards.

That said, the analysts might have good reason to be negative on TRC Synergy Berhad, given its declining profit margins. For more information, you can click here to discover this and the 3 other warning signs we've identified.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.