Earnings Update: Here's Why Analysts Just Lifted Their Mr D.I.Y. Group (M) Berhad (KLSE:MRDIY) Price Target To RM2.32

Mr D.I.Y. Group (M) Berhad (KLSE:MRDIY) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues came in 3.4% below expectations, at RM1.2b. Statutory earnings per share were relatively better off, with a per-share profit of RM0.016 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Mr D.I.Y. Group (M) Berhad after the latest results.

Check out our latest analysis for Mr D.I.Y. Group (M) Berhad

Taking into account the latest results, the most recent consensus for Mr D.I.Y. Group (M) Berhad from 15 analysts is for revenues of RM5.08b in 2024. If met, it would imply a solid 12% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 12% to RM0.069. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM5.09b and earnings per share (EPS) of RM0.069 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 9.1% to RM2.32despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Mr D.I.Y. Group (M) Berhad's earnings by assigning a price premium. 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. Currently, the most bullish analyst values Mr D.I.Y. Group (M) Berhad at RM2.74 per share, while the most bearish prices it at RM1.97. 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 Mr D.I.Y. Group (M) Berhad's past performance and to peers in the same industry. It's clear from the latest estimates that Mr D.I.Y. Group (M) Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Mr D.I.Y. Group (M) Berhad to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Mr D.I.Y. Group (M) 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 Mr D.I.Y. Group (M) 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 1 warning sign for Mr D.I.Y. Group (M) Berhad you should know about.

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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.