Earnings Miss: Nestlé (Malaysia) Berhad Missed EPS By 18% And Analysts Are Revising Their Forecasts

As you might know, Nestlé (Malaysia) Berhad (KLSE:NESTLE) last week released its latest full-year, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at RM6.2b, statutory earnings missed forecasts by 18%, coming in at just RM1.77 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Nestlé (Malaysia) Berhad

Taking into account the latest results, the consensus forecast from Nestlé (Malaysia) Berhad's twelve analysts is for revenues of RM6.49b in 2025. This reflects a modest 4.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 15% to RM2.03. In the lead-up to this report, the analysts had been modelling revenues of RM6.69b and earnings per share (EPS) of RM2.53 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The consensus price target fell 17% to RM81.56, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on Nestlé (Malaysia) Berhad, with the most bullish analyst valuing it at RM102 and the most bearish at RM60.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Nestlé (Malaysia) Berhad's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.2% growth on an annualised basis. This is compared to a historical growth rate of 5.6% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.7% annually. So it's pretty clear that, while Nestlé (Malaysia) Berhad's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Nestlé (Malaysia) Berhad's future valuation.

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 Nestlé (Malaysia) Berhad analysts - going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Nestlé (Malaysia) Berhad , and understanding it should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.