S P Setia Berhad (KLSE:SPSETIA) Just Reported And Analysts Have Been Lifting Their Price Targets

The annual results for S P Setia Berhad (KLSE:SPSETIA) were released last week, making it a good time to revisit its performance. Revenues came in 2.5% below expectations, at RM4.4b. Statutory earnings per share were relatively better off, with a per-share profit of RM0.048 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for S P Setia Berhad

Following the latest results, S P Setia Berhad's 14 analysts are now forecasting revenues of RM4.79b in 2024. This would be a meaningful 9.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 12% to RM0.075. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM4.62b and earnings per share (EPS) of RM0.064 in 2024. So it seems there's been a definite increase in optimism about S P Setia Berhad's future following the latest results, with a decent improvement in the earnings per share forecasts in particular.

It will come as no surprise to learn that the analysts have increased their price target for S P Setia Berhad 12% to RM1.03on the back of these upgrades. 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. The most optimistic S P Setia Berhad analyst has a price target of RM1.29 per share, while the most pessimistic values it at RM0.46. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. It's clear from the latest estimates that S P Setia Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 9.6% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.1% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.1% per year. S P Setia Berhad is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards S P Setia Berhad following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that S P Setia 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 S P Setia Berhad analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with S P Setia Berhad (including 1 which is significant) .

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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.