Need To Know: This Analyst Just Made A Substantial Cut To Their United U-LI Corporation Berhad (KLSE:ULICORP) Estimates

Today is shaping up negative for United U-LI Corporation Berhad (KLSE:ULICORP) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

After the downgrade, the solitary analyst covering United U-LI Corporation Berhad is now predicting revenues of RM202m in 2021. If met, this would reflect a major 20% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 200% to RM0.19. Before this latest update, the analyst had been forecasting revenues of RM230m and earnings per share (EPS) of RM0.22 in 2021. Indeed, we can see that the analyst is a lot more bearish about United U-LI Corporation Berhad's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for United U-LI Corporation Berhad

The consensus price target fell 7.5% to RM1.85, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the United U-LI Corporation Berhad's past performance and to peers in the same industry. For example, we noticed that United U-LI Corporation Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 20% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 3.1% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.6% annually. So it looks like United U-LI Corporation Berhad is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for United U-LI Corporation Berhad. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of United U-LI Corporation Berhad.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for United U-LI Corporation Berhad going out as far as 2022, and you can see them free on our platform here.

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 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.
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