CapitaLand Malaysia Mall Trust Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

CapitaLand Malaysia Mall Trust (KLSE:CMMT) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues came in at RM261m, in line with estimates, while CapitaLand Malaysia Mall Trust reported a statutory loss of RM0.041 per share, well short of prior analyst forecasts for a profit. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for CapitaLand Malaysia Mall Trust

Following the latest results, CapitaLand Malaysia Mall Trust's eight analysts are now forecasting revenues of RM291.2m in 2021. This would be a solid 11% improvement in sales compared to the last 12 months. Earnings are expected to improve, with CapitaLand Malaysia Mall Trust forecast to report a statutory profit of RM0.034 per share. Before this earnings report, the analysts had been forecasting revenues of RM301.6m and earnings per share (EPS) of RM0.042 in 2021. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the RM0.63 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 CapitaLand Malaysia Mall Trust analyst has a price target of RM0.75 per share, while the most pessimistic values it at RM0.56. This is a very narrow spread of estimates, implying either that CapitaLand Malaysia Mall Trust is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that CapitaLand Malaysia Mall Trust's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 11%, well above its historical decline of 4.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.0% per year. So it looks like CapitaLand Malaysia Mall Trust is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CapitaLand Malaysia Mall Trust. They also downgraded their revenue estimates, although industry data suggests that CapitaLand Malaysia Mall Trust's revenues are expected to grow faster than the wider industry. The consensus price target held steady at RM0.63, with the latest estimates not enough to have an impact on their price targets.

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 CapitaLand Malaysia Mall Trust analysts - going out to 2023, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for CapitaLand Malaysia Mall Trust (1 is a bit unpleasant!) that you need to take into consideration.

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This article by Simply Wall St is general in nature. 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.
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