Upgrade: Analysts Just Made A Notable Increase To Their United Malacca Berhad (KLSE:UMCCA) Forecasts

Shareholders in United Malacca Berhad (KLSE:UMCCA) 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.

Following the upgrade, the latest consensus from United Malacca Berhad's three analysts is for revenues of RM566m in 2022, which would reflect a decent 10% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 52% to RM0.55. Prior to this update, the analysts had been forecasting revenues of RM512m and earnings per share (EPS) of RM0.47 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for United Malacca Berhad

It will come as no surprise to learn that the analysts have increased their price target for United Malacca Berhad 5.5% to RM6.05 on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on United Malacca Berhad, with the most bullish analyst valuing it at RM6.83 and the most bearish at RM5.41 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting United Malacca Berhad is an easy business to forecast or the underlying assumptions are obvious.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that United Malacca Berhad's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2022 being well below the historical 13% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.9% per year. Even after the forecast slowdown in growth, it seems obvious that United Malacca Berhad is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, United Malacca Berhad could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for United Malacca Berhad 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.