Analysts Are Upgrading Media Prima Berhad (KLSE:MEDIA) After Its Latest Results

It's been a good week for Media Prima Berhad (KLSE:MEDIA) shareholders, because the company has just released its latest full-year results, and the shares gained 6.7% to RM0.56. It looks like the results were pretty good overall. While revenues of RM1.0b were in line with analyst predictions, statutory losses were much smaller than expected, with Media Prima Berhad losing RM0.017 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Media Prima Berhad

Taking into account the latest results, the consensus forecast from Media Prima Berhad's nine analysts is for revenues of RM1.16b in 2021, which would reflect a solid 11% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Media Prima Berhad forecast to report a statutory profit of RM0.02 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of RM1.07b and losses of RM0.001 per share in 2021. The analysts have definitely been lifting their expectations, with the company expected to reach profitability next year - sooner than expected - thanks to the small lift in revenue expectations.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 84% to RM0.49per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Media Prima Berhad analyst has a price target of RM0.66 per share, while the most pessimistic values it at RM0.19. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. One thing stands out from these estimates, which is that Media Prima Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to grow 11%. If achieved, this would be a much better result than the 6.1% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 13% next year. So it looks like Media Prima Berhad is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Media Prima Berhad to become profitable next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Media Prima Berhad will grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Media Prima Berhad analysts - going out to 2023, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Media Prima Berhad you should know about.

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