What You Need To Know About The TRC Synergy Berhad (KLSE:TRC) Analyst Downgrade Today

The analysts covering TRC Synergy Berhad (KLSE:TRC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the current consensus, from the twin analysts covering TRC Synergy Berhad, is for revenues of RM384m in 2024, which would reflect a definite 18% reduction in TRC Synergy Berhad's sales over the past 12 months. Before the latest update, the analysts were foreseeing RM465m of revenue in 2024. It looks like forecasts have become a fair bit less optimistic on TRC Synergy Berhad, given the measurable cut to revenue estimates.

Check out our latest analysis for TRC Synergy Berhad

Notably, the analysts have cut their price target 12% to RM0.49, suggesting concerns around TRC Synergy Berhad's valuation.

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. 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 18% to the end of 2024. This tops off a historical decline of 5.5% 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 14% annually. So while a broad number of companies are forecast to grow, unfortunately TRC Synergy Berhad is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for TRC Synergy Berhad this year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of TRC Synergy Berhad's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of TRC Synergy Berhad going forwards.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with TRC Synergy Berhad's business, like concerns around earnings quality. For more information, you can click here to discover this and the 3 other risks we've identified.

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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.