Analysts Have Made A Financial Statement On Genting Malaysia Berhad's (KLSE:GENM) Second-Quarter Report

The second-quarter results for Genting Malaysia Berhad (KLSE:GENM) were released last week, making it a good time to revisit its performance. Results look mixed - while revenue fell marginally short of analyst estimates at RM2.7b, statutory earnings were in line with expectations, at RM0.077 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Genting Malaysia Berhad

Taking into account the latest results, Genting Malaysia Berhad's 13 analysts currently expect revenues in 2024 to be RM10.9b, approximately in line with the last 12 months. Per-share earnings are expected to soar 38% to RM0.14. Before this earnings report, the analysts had been forecasting revenues of RM11.1b and earnings per share (EPS) of RM0.15 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at RM3.18, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on Genting Malaysia Berhad, with the most bullish analyst valuing it at RM4.00 and the most bearish at RM2.65 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's pretty clear that there is an expectation that Genting Malaysia Berhad's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.4% growth on an annualised basis. This is compared to a historical growth rate of 5.0% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Genting Malaysia Berhad is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Genting Malaysia Berhad. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at RM3.18, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Genting Malaysia Berhad going out to 2026, and you can see them free on our platform here.

Even so, be aware that Genting Malaysia Berhad is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...

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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.