Stock Analysis

This Just In: Analysts Are Boosting Their Ta Ann Holdings Berhad (KLSE:TAANN) Outlook for This Year

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Shareholders in Ta Ann Holdings Berhad (KLSE:TAANN) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the latest upgrade, Ta Ann Holdings Berhad's seven analysts currently expect revenues in 2022 to be RM1.9b, approximately in line with the last 12 months. Statutory earnings per share are supposed to fall 11% to RM0.64 in the same period. Previously, the analysts had been modelling revenues of RM1.5b and earnings per share (EPS) of RM0.34 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Ta Ann Holdings Berhad

KLSE:TAANN Earnings and Revenue Growth March 6th 2022

With these upgrades, we're not surprised to see that the analysts have lifted their price target 49% to RM5.67 per share. 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. Currently, the most bullish analyst values Ta Ann Holdings Berhad at RM6.60 per share, while the most bearish prices it at RM4.41. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 2.0% by the end of 2022. This indicates a significant reduction from annual growth of 6.5% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.2% per year. The forecasts do look bearish for Ta Ann Holdings Berhad, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Ta Ann Holdings Berhad.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Ta Ann Holdings Berhad analysts - going out to 2024, 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.

Valuation is complex, but we're helping make it simple.

Find out whether Ta Ann Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.