Earnings Miss: Genting Berhad Missed EPS By 25% And Analysts Are Revising Their Forecasts

Last week, you might have seen that Genting Berhad (KLSE:GENTING) released its annual result to the market. The early response was not positive, with shares down 3.7% to RM4.67 in the past week. Results overall were not great, with earnings of RM0.24 per share falling drastically short of analyst expectations. Meanwhile revenues hit RM27b and were slightly better than forecasts. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Genting Berhad

Taking into account the latest results, the current consensus from Genting Berhad's 13 analysts is for revenues of RM28.0b in 2024. This would reflect a satisfactory 3.3% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 84% to RM0.44. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM28.0b and earnings per share (EPS) of RM0.44 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of RM5.75, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Genting Berhad analyst has a price target of RM7.12 per share, while the most pessimistic values it at RM4.30. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Genting Berhad shareholders.

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 Genting Berhad's revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2024 being well below the historical 4.9% 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 4.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Genting Berhad is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Genting Berhad's revenue is expected to perform worse than the wider industry. The consensus price target held steady at RM5.75, with the latest estimates not enough to have an impact on their price targets.

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. We have forecasts for Genting Berhad going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Genting Berhad that you should be aware 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.