Stock Analysis

The Consensus EPS Estimates For Beshom Holdings Berhad (KLSE:BESHOM) Just Fell Dramatically

KLSE:BESHOM
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The analysts covering Beshom Holdings Berhad (KLSE:BESHOM) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, Beshom Holdings Berhad's twin analysts currently expect revenues in 2023 to be RM178m, approximately in line with the last 12 months. Statutory earnings per share are supposed to fall 15% to RM0.054 in the same period. Previously, the analysts had been modelling revenues of RM214m and earnings per share (EPS) of RM0.088 in 2023. Indeed, we can see that the analysts are a lot more bearish about Beshom Holdings Berhad's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Beshom Holdings Berhad

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KLSE:BESHOM Earnings and Revenue Growth March 29th 2023

It'll come as no surprise then, to learn that the analysts have cut their price target 16% to RM1.11. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Beshom Holdings Berhad at RM1.11 per share, while the most bearish prices it at RM1.10. This is a very narrow spread of estimates, implying either that Beshom Holdings Berhad is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Beshom Holdings Berhad's past performance and to peers in the same industry. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2023 compared to the historical decline of 17% per annum 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 9.0% annually. So while a broad number of companies are forecast to grow, unfortunately Beshom Holdings Berhad is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Beshom Holdings Berhad. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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 Beshom Holdings Berhad.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Beshom Holdings Berhad's financials, such as the risk of cutting its dividend. Learn more, and discover the 1 other risk we've identified, 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.

Valuation is complex, but we're helping make it simple.

Find out whether Beshom Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.