Press Metal Aluminium Holdings Berhad Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Press Metal Aluminium Holdings Berhad (KLSE:PMETAL) released its half-year result to the market. The early response was not positive, with shares down 3.3% to RM4.97 in the past week. It looks like a credible result overall - although revenues of RM7.6b were what the analysts expected, Press Metal Aluminium Holdings Berhad surprised by delivering a (statutory) profit of RM0.061 per share, an impressive 46% above what was forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Press Metal Aluminium Holdings Berhad after the latest results.

See our latest analysis for Press Metal Aluminium Holdings Berhad

Taking into account the latest results, the most recent consensus for Press Metal Aluminium Holdings Berhad from 13 analysts is for revenues of RM15.5b in 2024. If met, it would imply a satisfactory 6.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to climb 16% to RM0.22. Before this earnings report, the analysts had been forecasting revenues of RM15.4b and earnings per share (EPS) of RM0.23 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at RM6.24, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Press Metal Aluminium Holdings Berhad analyst has a price target of RM6.90 per share, while the most pessimistic values it at RM5.60. This is a very narrow spread of estimates, implying either that Press Metal Aluminium Holdings Berhad is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 Press Metal Aluminium Holdings Berhad'shistorical trends, as the 13% annualised revenue growth to the end of 2024 is roughly in line with the 15% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.3% annually. So it's pretty clear that Press Metal Aluminium Holdings Berhad is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 Press Metal Aluminium Holdings Berhad analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Press Metal Aluminium Holdings Berhad'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.