Need To Know: Analysts Are Much More Bullish On Malaysia Marine and Heavy Engineering Holdings Berhad (KLSE:MHB)

Malaysia Marine and Heavy Engineering Holdings Berhad (KLSE:MHB) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

After the upgrade, the nine analysts covering Malaysia Marine and Heavy Engineering Holdings Berhad are now predicting revenues of RM1.6b in 2021. If met, this would reflect a huge 41% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting RM0.014 in per-share earnings. Before this latest update, the analysts had been forecasting revenues of RM1.5b and earnings per share (EPS) of RM0.0097 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Malaysia Marine and Heavy Engineering Holdings Berhad

It will come as no surprise to learn that the analysts have increased their price target for Malaysia Marine and Heavy Engineering Holdings Berhad 7.0% to RM0.44 on the back of these upgrades. 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. There are some variant perceptions on Malaysia Marine and Heavy Engineering Holdings Berhad, with the most bullish analyst valuing it at RM0.65 and the most bearish at RM0.29 per share. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Malaysia Marine and Heavy Engineering Holdings Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 41%, well above its historical decline of 17% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 8.1% next year. So it looks like Malaysia Marine and Heavy Engineering Holdings Berhad is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Malaysia Marine and Heavy Engineering Holdings Berhad could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Malaysia Marine and Heavy Engineering Holdings Berhad analysts - going out to 2023, and you can see them 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.

When trading Malaysia Marine and Heavy Engineering Holdings Berhad or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.