Analysts Are Betting On Malaysia Smelting Corporation Berhad (KLSE:MSC) With A Big Upgrade This Week

Shareholders in Malaysia Smelting Corporation Berhad (KLSE:MSC) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Malaysia Smelting Corporation Berhad will make substantially more sales than they'd previously expected.

Following the latest upgrade, the current consensus, from the three analysts covering Malaysia Smelting Corporation Berhad, is for revenues of RM1.4b in 2023, which would reflect a measurable 5.4% reduction in Malaysia Smelting Corporation Berhad's sales over the past 12 months. Per-share earnings are expected to rise 9.3% to RM0.26. Prior to this update, the analysts had been forecasting revenues of RM1.3b and earnings per share (EPS) of RM0.24 in 2023. Sentiment certainly seems to have improved in recent times, with a nice increase in revenue and a small increase to earnings per share estimates.

See our latest analysis for Malaysia Smelting Corporation Berhad

With these upgrades, we're not surprised to see that the analysts have lifted their price target 20% to RM2.25 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Malaysia Smelting Corporation Berhad at RM2.69 per share, while the most bearish prices it at RM1.96. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Malaysia Smelting Corporation Berhad shareholders.

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. Over the past five years, revenues have declined around 2.5% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 5.4% decline in revenue until the end of 2023. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 8.0% annually. So while a broad number of companies are forecast to grow, unfortunately Malaysia Smelting Corporation Berhad is expected to see its sales affected worse than other companies in the 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. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Malaysia Smelting Corporation Berhad.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Malaysia Smelting Corporation Berhad analysts - going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.