Earnings Beat: Hibiscus Petroleum Berhad Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Hibiscus Petroleum Berhad (KLSE:HIBISCS) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat both earnings and revenue forecasts, with revenue of RM1.7b, some 7.6% above estimates, and statutory earnings per share (EPS) coming in at RM0.30, 103% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Hibiscus Petroleum Berhad

After the latest results, the seven analysts covering Hibiscus Petroleum Berhad are now predicting revenues of RM2.37b in 2023. If met, this would reflect a major 40% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to decrease 2.2% to RM0.30 in the same period. Before this earnings report, the analysts had been forecasting revenues of RM2.24b and earnings per share (EPS) of RM0.26 in 2023. So it seems there's been a definite increase in optimism about Hibiscus Petroleum Berhad's future following the latest results, with a nice increase in the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of RM1.50, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Hibiscus Petroleum Berhad at RM1.90 per share, while the most bearish prices it at RM0.96. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. The analysts are definitely expecting Hibiscus Petroleum Berhad's growth to accelerate, with the forecast 40% annualised growth to the end of 2023 ranking favourably alongside historical growth of 22% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.7% annually. It seems obvious that as part of the brighter growth outlook, Hibiscus Petroleum Berhad is expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Hibiscus Petroleum Berhad's earnings potential next year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider industry. The consensus price target held steady at RM1.50, 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. At Simply Wall St, we have a full range of analyst estimates for Hibiscus Petroleum Berhad going out to 2025, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 3 warning signs for Hibiscus Petroleum Berhad (1 makes us a bit uncomfortable!) that you need to be mindful 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.