Earnings Beat: MBM Resources Berhad Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

MBM Resources Berhad (KLSE:MBMR) 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. It looks like a credible result overall - although revenues of RM2.4b were what the analysts expected, MBM Resources Berhad surprised by delivering a (statutory) profit of RM0.86 per share, an impressive 22% above what was forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for MBM Resources Berhad

Taking into account the latest results, the nine analysts covering MBM Resources Berhad provided consensus estimates of RM2.25b revenue in 2024, which would reflect a discernible 6.9% decline over the past 12 months. Statutory earnings per share are forecast to nosedive 25% to RM0.64 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM2.26b and earnings per share (EPS) of RM0.61 in 2024. So the consensus seems to have become somewhat more optimistic on MBM Resources Berhad's earnings potential following these results.

The consensus price target was unchanged at RM4.60, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic MBM Resources Berhad analyst has a price target of RM5.80 per share, while the most pessimistic values it at RM3.95. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.9% by the end of 2024. This indicates a significant reduction from annual growth of 4.3% 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 11% per year. It's pretty clear that MBM Resources Berhad's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards MBM Resources Berhad following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on MBM Resources Berhad. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for MBM Resources Berhad going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for MBM Resources Berhad (of which 1 can't be ignored!) you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.