Upgrade: Analysts Just Made A Meaningful Increase To Their Lee Swee Kiat Group Berhad (KLSE:LEESK) Forecasts

Shareholders in Lee Swee Kiat Group Berhad (KLSE:LEESK) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. Investors have been pretty optimistic on Lee Swee Kiat Group Berhad too, with the stock up 17% to RM0.70 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

After the upgrade, the consensus from Lee Swee Kiat Group Berhad's sole analyst is for revenues of RM88m in 2020, which would reflect a not inconsiderable 8.2% decline in sales compared to the last year of performance. Statutory earnings per share are expected to be RM0.05, roughly flat on the last 12 months. Prior to this update, the analyst had been forecasting revenues of RM72m and earnings per share (EPS) of RM0.027 in 2020. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Check out our latest analysis for Lee Swee Kiat Group Berhad

It will come as no surprise to learn that the analyst has increased their price target for Lee Swee Kiat Group Berhad 41% to RM0.96 on the back of these upgrades.

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. We would highlight that sales are expected to reverse, with the forecast 8.2% revenue decline a notable change from historical growth of 10.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.0% next year. It's pretty clear that Lee Swee Kiat Group Berhad's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Pleasantly, the analyst also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Lee Swee Kiat Group Berhad could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Lee Swee Kiat Group Berhad going out as far as 2022, and you can see them 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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