Kuala Lumpur Kepong Berhad Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Kuala Lumpur Kepong Berhad (KLSE:KLK) just released its latest third-quarter report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at RM5.5b, statutory earnings missed forecasts by an incredible 37%, coming in at just RM0.22 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Kuala Lumpur Kepong Berhad

Taking into account the latest results, the consensus forecast from Kuala Lumpur Kepong Berhad's 18 analysts is for revenues of RM24.5b in 2025. This reflects a solid 9.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 86% to RM1.19. In the lead-up to this report, the analysts had been modelling revenues of RM24.3b and earnings per share (EPS) of RM1.26 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at RM22.54, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Kuala Lumpur Kepong Berhad analyst has a price target of RM25.40 per share, while the most pessimistic values it at RM19.50. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kuala Lumpur Kepong Berhad's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Kuala Lumpur Kepong Berhad's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.7% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.5% annually. Even after the forecast slowdown in growth, it seems obvious that Kuala Lumpur Kepong Berhad is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at RM22.54, with the latest estimates not enough to have an impact on their price targets.

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 Kuala Lumpur Kepong Berhad going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Kuala Lumpur Kepong Berhad (2 are a bit concerning!) that you should be aware of.

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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.