Rainbows and Unicorns: Fiamma Holdings Berhad (KLSE:FIAMMA) Analysts Just Became A Lot More Optimistic

Shareholders in Fiamma Holdings Berhad (KLSE:FIAMMA) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the latest upgrade, Fiamma Holdings Berhad's dual analysts currently expect revenues in 2023 to be RM390m, approximately in line with the last 12 months. Statutory earnings per share are supposed to plummet 33% to RM0.068 in the same period. Before this latest update, the analysts had been forecasting revenues of RM326m and earnings per share (EPS) of RM0.058 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Fiamma Holdings Berhad

Despite these upgrades, the analysts have not made any major changes to their price target of RM0.79, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Fiamma Holdings Berhad analyst has a price target of RM1.00 per share, while the most pessimistic values it at RM0.57. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Fiamma Holdings Berhad's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 1.7% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 2.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Fiamma Holdings Berhad is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Fiamma Holdings Berhad could be a good candidate for more research.

Analysts are definitely bullish on Fiamma Holdings Berhad, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other risks we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.