Forecast: Analysts Think Genting Plantations Berhad's (KLSE:GENP) Business Prospects Have Improved Drastically

Shareholders in Genting Plantations Berhad (KLSE:GENP) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The stock price has risen 8.0% to RM9.58 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

After this upgrade, Genting Plantations Berhad's 14 analysts are now forecasting revenues of RM3.4b in 2022. This would be a notable 8.5% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to climb 15% to RM0.56. Before this latest update, the analysts had been forecasting revenues of RM2.9b and earnings per share (EPS) of RM0.41 in 2022. 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.

View our latest analysis for Genting Plantations Berhad

With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to RM9.55 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Genting Plantations Berhad analyst has a price target of RM12.00 per share, while the most pessimistic values it at RM7.15. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Genting Plantations Berhad shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Genting Plantations Berhad's revenue growth is expected to slow, with the forecast 8.5% annualised growth rate until the end of 2022 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 0.3% annually. So it's pretty clear that, while Genting Plantations Berhad's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Genting Plantations Berhad.

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 Genting Plantations Berhad analysts - going out to 2024, 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.

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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.