Hil Industries Berhad Just Missed EPS By 16%: Here's What Analysts Think Will Happen Next

As you might know, Hil Industries Berhad (KLSE:HIL) last week released its latest full-year, and things did not turn out so great for shareholders. Hil Industries Berhad missed earnings this time around, with RM170m revenue coming in 5.0% below what the analysts had modelled. Statutory earnings per share (EPS) of RM0.072 also fell short of expectations by 16%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Hil Industries Berhad

Following the latest results, Hil Industries Berhad's two analysts are now forecasting revenues of RM188.1m in 2023. This would be a decent 10% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 30% to RM0.094. Before this earnings report, the analysts had been forecasting revenues of RM199.6m and earnings per share (EPS) of RM0.11 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The consensus price target fell 14% to RM0.99, with the weaker earnings outlook clearly leading valuation estimates.

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. We can infer from the latest estimates that forecasts expect a continuation of Hil Industries Berhad'shistorical trends, as the 10% annualised revenue growth to the end of 2023 is roughly in line with the 12% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.7% per year. So although Hil Industries Berhad is expected to maintain its revenue growth rate, it's definitely expected 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 Hil Industries Berhad. They also downgraded their revenue estimates, although industry data suggests that Hil Industries Berhad's revenues are expected to grow faster than 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 Hil Industries 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 analyst estimates for Hil Industries Berhad going out as far as 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Hil Industries Berhad that you need to be mindful of.

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.