HPP Holdings Berhad (KLSE:HPPHB) Analysts Just Cut Their EPS Forecasts Substantially

The latest analyst coverage could presage a bad day for HPP Holdings Berhad (KLSE:HPPHB), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After the downgrade, the two analysts covering HPP Holdings Berhad are now predicting revenues of RM84m in 2024. If met, this would reflect a huge 21% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 46% to RM0.007 in the same period. Prior to this update, the analysts had been forecasting revenues of RM95m and earnings per share (EPS) of RM0.027 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for HPP Holdings Berhad

It'll come as no surprise then, to learn that the analysts have cut their price target 28% to RM0.41.

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. One thing stands out from these estimates, which is that HPP Holdings Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 21% annualised growth until the end of 2024. If achieved, this would be a much better result than the 6.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 14% per year. So it looks like HPP Holdings Berhad is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of HPP Holdings Berhad.

There might be good reason for analyst bearishness towards HPP Holdings Berhad, like the risk of cutting its dividend. For more information, you can click here to discover this and the 2 other warning signs we've identified.

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.