Revenue Miss: Chin Teck Plantations Berhad Fell 6.5% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

The analysts might have been a bit too bullish on Chin Teck Plantations Berhad (KLSE:CHINTEK), given that the company fell short of expectations when it released its yearly results last week. Results look to have been somewhat negative - revenue fell 6.5% short of analyst estimates at RM206m, and statutory earnings of RM0.58 per share missed forecasts by 2.2%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Chin Teck Plantations Berhad

Taking into account the latest results, the consensus forecast from Chin Teck Plantations Berhad's twin analysts is for revenues of RM247.8m in 2024. This reflects a major 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 30% to RM0.76. Before this earnings report, the analysts had been forecasting revenues of RM224.4m and earnings per share (EPS) of RM0.73 in 2024. Sentiment certainly seems to have improved after the latest results, with a decent improvement in revenue and a small increase to earnings per share estimates.

As a result, it might be a surprise to see thatthe analysts have cut their price target 22% to RM7.63, which could suggest the forecast improvement in performance is not expected to last.

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. It's clear from the latest estimates that Chin Teck Plantations Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 17% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Chin Teck Plantations Berhad 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 Chin Teck Plantations Berhad's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Chin Teck Plantations Berhad. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

It is also worth noting that we have found 2 warning signs for Chin Teck Plantations Berhad that you need to take into consideration.

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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.