Rainbows and Unicorns: The Petron Malaysia Refining & Marketing Bhd (KLSE:PETRONM) Analyst Just Became A Lot More Optimistic

Petron Malaysia Refining & Marketing Bhd (KLSE:PETRONM) shareholders will have a reason to smile today, with the covering analyst 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 analyst modelling a real improvement in business performance.

After the upgrade, the consensus from Petron Malaysia Refining & Marketing Bhd's solo analyst is for revenues of RM16b in 2023, which would reflect a considerable 15% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to decrease 8.2% to RM1.03 in the same period. Prior to this update, the analyst had been forecasting revenues of RM14b and earnings per share (EPS) of RM0.82 in 2023. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Check out our latest analysis for Petron Malaysia Refining & Marketing Bhd

It will come as no surprise to learn that the analyst has increased their price target for Petron Malaysia Refining & Marketing Bhd 6.9% to RM4.65 on the back of these upgrades.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 15% by the end of 2023. This indicates a significant reduction from annual growth of 6.5% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 3.1% per year. So it's pretty clear that Petron Malaysia Refining & Marketing Bhd's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Notably, the analyst also upgraded their revenue estimates, with sales performing well although Petron Malaysia Refining & Marketing Bhd's revenue growth is expected to trail that of the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Petron Malaysia Refining & Marketing Bhd.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Petron Malaysia Refining & Marketing Bhd going out as far as 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.