Analysts Have Been Trimming Their Berjaya Food Berhad (KLSE:BJFOOD) Price Target After Its Latest Report

Investors in Berjaya Food Berhad (KLSE:BJFOOD) had a good week, as its shares rose 3.6% to close at RM0.71 following the release of its full-year results. The result was positive overall - although revenues of RM1.1b were in line with what the analysts predicted, Berjaya Food Berhad surprised by delivering a statutory profit of RM0.059 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Berjaya Food Berhad

Following the latest results, Berjaya Food Berhad's five analysts are now forecasting revenues of RM1.21b in 2024. This would be a decent 8.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to sink 12% to RM0.052 in the same period. In the lead-up to this report, the analysts had been modelling revenues of RM1.23b and earnings per share (EPS) of RM0.058 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

It might be a surprise to learn that the consensus price target fell 5.9% to RM0.86, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Berjaya Food Berhad at RM1.20 per share, while the most bearish prices it at RM0.65. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Berjaya Food Berhad's revenue growth is expected to slow, with the forecast 8.6% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% annually. Even after the forecast slowdown in growth, it seems obvious that Berjaya Food Berhad is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Berjaya Food Berhad's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Berjaya Food Berhad going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Berjaya Food Berhad that you need to be mindful of.

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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.