Top Glove Corporation Bhd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a pretty great week for Top Glove Corporation Bhd. (KLSE:TOPGLOV) shareholders, with its shares surging 15% to RM0.68 in the week since its latest annual results. Revenues of RM3.5b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of RM0.014 an impressive 52% ahead of estimates. 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.

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Taking into account the latest results, the consensus forecast from Top Glove Corporation Bhd's 18 analysts is for revenues of RM4.09b in 2026. This reflects a decent 17% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 16% to RM0.019. Before this earnings report, the analysts had been forecasting revenues of RM4.22b and earnings per share (EPS) of RM0.022 in 2026. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

See our latest analysis for Top Glove Corporation Bhd

Despite the cuts to forecast earnings, there was no real change to the RM0.76 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Top Glove Corporation Bhd, with the most bullish analyst valuing it at RM1.40 and the most bearish at RM0.52 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Top Glove Corporation Bhd is forecast to grow faster in the future than it has in the past, with revenues expected to display 17% annualised growth until the end of 2026. If achieved, this would be a much better result than the 39% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually. Not only are Top Glove Corporation Bhd's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Top Glove Corporation Bhd. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at RM0.76, 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 Top Glove Corporation Bhd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Top Glove Corporation Bhd analysts - going out to 2028, and you can see them free on our platform here.

It might also be worth considering whether Top Glove Corporation Bhd's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.