These Analysts Just Made A Huge Downgrade To Their JHM Consolidation Berhad (KLSE:JHM) EPS Forecasts

One thing we could say about the analysts on JHM Consolidation Berhad (KLSE:JHM) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the most recent consensus for JHM Consolidation Berhad from its dual analysts is for revenues of RM322m in 2024 which, if met, would be a meaningful 20% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to tumble 25% to RM0.01 in the same period. Previously, the analysts had been modelling revenues of RM393m and earnings per share (EPS) of RM0.05 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for JHM Consolidation Berhad

Analysts made no major changes to their price target of RM0.80, suggesting the downgrades are not expected to have a long-term impact on JHM Consolidation Berhad's valuation.

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. It's clear from the latest estimates that JHM Consolidation Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 6.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect JHM Consolidation Berhad to grow faster than the wider industry.

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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on JHM Consolidation Berhad after the downgrade.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for JHM Consolidation Berhad going out as far as 2026, and you can see them free on our platform here.

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 backed by insiders.

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.