IHH Healthcare Berhad Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Investors in IHH Healthcare Berhad (KLSE:IHH) had a good week, as its shares rose 3.3% to close at RM5.63 following the release of its quarterly results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at RM3.5b, statutory earnings beat expectations by a notable 215%, coming in at RM0.033 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for IHH Healthcare Berhad

Taking into account the latest results, the consensus forecast from IHH Healthcare Berhad's 20 analysts is for revenues of RM15.5b in 2021, which would reflect a decent 15% improvement in sales compared to the last 12 months. Earnings are expected to improve, with IHH Healthcare Berhad forecast to report a statutory profit of RM0.11 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM15.7b and earnings per share (EPS) of RM0.11 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of RM5.89, suggesting that the company has met expectations in its recent result. 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 IHH Healthcare Berhad analyst has a price target of RM6.98 per share, while the most pessimistic values it at RM4.56. 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 clear from the latest estimates that IHH Healthcare Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 15% revenue growth noticeably faster than its historical growth of 11%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect IHH Healthcare 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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 estimates - from multiple IHH Healthcare Berhad analysts - going out to 2022, and you can see them free on our platform here.

You can also view our analysis of IHH Healthcare Berhad's balance sheet, and whether we think IHH Healthcare Berhad is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. 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.
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