Kuala Lumpur Kepong Berhad Just Missed EPS By 69%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Kuala Lumpur Kepong Berhad (KLSE:KLK), given that the company fell short of expectations when it released its second-quarter results last week. Unfortunately, Kuala Lumpur Kepong Berhad delivered a serious earnings miss. Revenues of RM5.5b were 17% below expectations, and statutory earnings per share of RM0.11 missed estimates by 69%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Kuala Lumpur Kepong Berhad

Taking into account the latest results, the current consensus from Kuala Lumpur Kepong Berhad's 18 analysts is for revenues of RM24.5b in 2024. This would reflect a solid 12% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 98% to RM0.98. In the lead-up to this report, the analysts had been modelling revenues of RM24.8b and earnings per share (EPS) of RM1.20 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

The consensus price target held steady at RM23.29, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Kuala Lumpur Kepong Berhad analyst has a price target of RM25.50 per share, while the most pessimistic values it at RM19.57. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 clear from the latest estimates that Kuala Lumpur Kepong Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kuala Lumpur Kepong Berhad 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 RM23.29, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Kuala Lumpur Kepong Berhad. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Kuala Lumpur Kepong Berhad going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Kuala Lumpur Kepong Berhad you should be aware of, and 2 of them are significant.

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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.