UOA Development Bhd (KLSE:UOADEV) Analysts Are Reducing Their Forecasts For This Year

The analysts covering UOA Development Bhd (KLSE:UOADEV) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, UOA Development Bhd's five analysts currently expect revenues in 2023 to be RM490m, approximately in line with the last 12 months. Statutory earnings per share are anticipated to sink 18% to RM0.082 in the same period. Previously, the analysts had been modelling revenues of RM572m and earnings per share (EPS) of RM0.091 in 2023. Indeed, we can see that the analysts are a lot more bearish about UOA Development Bhd's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for UOA Development Bhd

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. For example, we noticed that UOA Development Bhd's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.2% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 22% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.2% annually for the foreseeable future. Although UOA Development Bhd's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for UOA Development Bhd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that UOA Development Bhd's revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on UOA Development Bhd, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for UOA Development Bhd 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 downgrading 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.