Berjaya Food Berhad (KLSE:BJFOOD) Analysts Are Reducing Their Forecasts For This Year

Market forces rained on the parade of Berjaya Food Berhad (KLSE:BJFOOD) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from four analysts covering Berjaya Food Berhad is for revenues of RM929m in 2024, implying a measurable 7.0% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 340% to RM0.024. Prior to this update, the analysts had been forecasting revenues of RM1.0b and earnings per share (EPS) of RM0.035 in 2024. Indeed, we can see that the analysts are a lot more bearish about Berjaya Food Berhad's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Berjaya Food Berhad

The consensus price target fell 14% to RM0.56, with the weaker earnings outlook clearly leading analyst valuation estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 7.0% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Berjaya Food Berhad is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Berjaya Food Berhad.

That said, the analysts might have good reason to be negative on Berjaya Food Berhad, given its declining profit margins. For more information, you can click here to discover this and the 2 other risks we've identified.

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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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.