Analyst Estimates: Here's What Brokers Think Of Bursa Malaysia Berhad (KLSE:BURSA) After Its Second-Quarter Report

The second-quarter results for Bursa Malaysia Berhad (KLSE:BURSA) were released last week, making it a good time to revisit its performance. It was a credible result overall, with revenues of RM200m and statutory earnings per share of RM0.31 both in line with analyst estimates, showing that Bursa Malaysia Berhad is executing in line with expectations. 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. 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 Bursa Malaysia Berhad

Following last week's earnings report, Bursa Malaysia Berhad's 16 analysts are forecasting 2024 revenues to be RM756.0m, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 4.3% to RM0.39. Before this earnings report, the analysts had been forecasting revenues of RM759.3m and earnings per share (EPS) of RM0.39 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 RM10.19, 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. Currently, the most bullish analyst values Bursa Malaysia Berhad at RM11.20 per share, while the most bearish prices it at RM8.80. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Bursa Malaysia Berhad is an easy business to forecast or the the analysts are all using similar assumptions.

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 Bursa Malaysia Berhad's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.7% growth on an annualised basis. This is compared to a historical growth rate of 1.1% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Bursa Malaysia Berhad.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Bursa Malaysia Berhad going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Bursa Malaysia Berhad you should know about.

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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.