What You Need To Know About The Mah Sing Group Berhad (KLSE:MAHSING) Analyst Downgrade Today

One thing we could say about the analysts on Mah Sing Group Berhad (KLSE:MAHSING) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, Mah Sing Group Berhad's ten analysts are now forecasting revenues of RM2.1b in 2022. This would be a substantial 23% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 61% to RM0.066. Before this latest update, the analysts had been forecasting revenues of RM2.4b and earnings per share (EPS) of RM0.075 in 2022. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

See our latest analysis for Mah Sing Group Berhad

It'll come as no surprise then, to learn that the analysts have cut their price target 6.2% to RM0.80. 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. There are some variant perceptions on Mah Sing Group Berhad, with the most bullish analyst valuing it at RM0.98 and the most bearish at RM0.70 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. For example, we noticed that Mah Sing Group Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 18% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 17% 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 8.9% annually. So it looks like Mah Sing Group Berhad is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Mah Sing Group Berhad's future valuation. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Mah Sing Group Berhad going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Mah Sing Group Berhad going out to 2024, 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.