IOI Corporation Berhad Just Beat EPS By 26%: Here's What Analysts Think Will Happen Next

Last week saw the newest second-quarter earnings release from IOI Corporation Berhad (KLSE:IOICORP), an important milestone in the company's journey to build a stronger business. IOI Corporation Berhad's revenues suffered a catastrophic miss, falling 21% short of forecasts, at RM2.4b. Statutory earnings per share however performed much better, hitting RM0.054, 26% above forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for IOI Corporation Berhad

Taking into account the latest results, the current consensus from IOI Corporation Berhad's 17 analysts is for revenues of RM10.5b in 2024. This would reflect a meaningful 14% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 44% to RM0.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM11.0b and earnings per share (EPS) of RM0.20 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of RM4.15, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on IOI Corporation Berhad's market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values IOI Corporation Berhad at RM4.80 per share, while the most bearish prices it at RM3.25. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that IOI Corporation Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.4% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect IOI Corporation Berhad to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for IOI Corporation Berhad going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for IOI Corporation Berhad you should know about.

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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.