IOI Properties Group Berhad Beat Revenue Forecasts By 10.0%: Here's What Analysts Are Forecasting Next

As you might know, IOI Properties Group Berhad (KLSE:IOIPG) recently reported its first-quarter numbers. Results overall were respectable, with statutory earnings of RM0.12 per share roughly in line with what the analysts had forecast. Revenues of RM2.5b came in 10.0% ahead of analyst predictions. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for IOI Properties Group Berhad

Taking into account the latest results, IOI Properties Group Berhad's seven analysts currently expect revenues in 2022 to be RM2.61b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 7.1% to RM0.13. Before this earnings report, the analysts had been forecasting revenues of RM2.59b and earnings per share (EPS) of RM0.13 in 2022. So the consensus seems to have become somewhat more optimistic on IOI Properties Group Berhad's earnings potential following these results.

There's been no major changes to the consensus price target of RM1.44, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on IOI Properties Group Berhad, with the most bullish analyst valuing it at RM1.60 and the most bearish at RM1.29 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. From these estimates it looks as though the analysts expect the years of declining sales to come to an end, given the flat revenue forecast out to 2022. That would be a definite improvement, given that the past five years have seen sales shrink 9.8% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.2% annually. So it's pretty clear that, although revenues are improving, IOI Properties Group Berhad is still expected to grow slower than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around IOI Properties Group Berhad's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that IOI Properties Group Berhad's revenues are expected to perform worse than the wider industry. The consensus price target held steady at RM1.44, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple IOI Properties Group Berhad analysts - going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for IOI Properties Group Berhad that we have uncovered.

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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.