New Forecasts: Here's What Analysts Think The Future Holds For KESM Industries Berhad (KLSE:KESM)

Shareholders in KESM Industries Berhad (KLSE:KESM) 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. The stock price has risen 7.0% to RM7.60 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the latest consensus from KESM Industries Berhad's twin analysts is for revenues of RM268m in 2024, which would reflect a notable 14% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting RM0.019 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of RM241m and earnings per share (EPS) of RM0.015 in 2024. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Check out our latest analysis for KESM Industries Berhad

Despite these upgrades, the analysts have not made any major changes to their price target of RM6.68, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the KESM Industries Berhad's past performance and to peers in the same industry. One thing stands out from these estimates, which is that KESM Industries Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 14% annualised growth until the end of 2024. If achieved, this would be a much better result than the 8.7% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 14% per year. So it looks like KESM Industries Berhad is expected to grow at about the same rate as 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. They also upgraded their revenue forecasts, although the latest estimates suggest that KESM Industries Berhad will grow in line with the overall market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at KESM Industries Berhad.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2025, which can be seen for 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 upgrading 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.