Party Time: Brokers Just Made Major Increases To Their Deleum Berhad (KLSE:DELEUM) Earnings Forecasts

Celebrations may be in order for Deleum Berhad (KLSE:DELEUM) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the upgrade, the current consensus from Deleum Berhad's twin analysts is for revenues of RM737m in 2023 which - if met - would reflect a satisfactory 5.5% increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 38% to RM0.14. Prior to this update, the analysts had been forecasting revenues of RM621m and earnings per share (EPS) of RM0.094 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Deleum Berhad

With these upgrades, we're not surprised to see that the analysts have lifted their price target 9.6% to RM1.10 per share. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Deleum Berhad analyst has a price target of RM1.26 per share, while the most pessimistic values it at RM0.82. This shows there is still some 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Deleum Berhad's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Deleum Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.5% annualised growth until the end of 2023. If achieved, this would be a much better result than the 1.7% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.0% per year. So while Deleum Berhad's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Deleum Berhad could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

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.