Industry Analysts Just Made A Sizeable Upgrade To Their FM Global Logistics Holdings Berhad (KLSE:FM) Revenue Forecasts

Celebrations may be in order for FM Global Logistics Holdings Berhad (KLSE:FM) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that FM Global Logistics Holdings Berhad will make substantially more sales than they'd previously expected.

Following the upgrade, the consensus from twin analysts covering FM Global Logistics Holdings Berhad is for revenues of RM1.1b in 2023, implying a small 5.5% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing RM946m of revenue in 2023. The consensus has definitely become more optimistic, showing a substantial gain in revenue forecasts.

Check out our latest analysis for FM Global Logistics Holdings Berhad

Notably, the analysts have cut their price target 24% to RM0.92, suggesting concerns around FM Global Logistics Holdings Berhad's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic FM Global Logistics Holdings Berhad analyst has a price target of RM1.01 per share, while the most pessimistic values it at RM0.82. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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. We would highlight that sales are expected to reverse, with a forecast 5.5% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 17% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 13% per year. So it's pretty clear that FM Global Logistics Holdings Berhad's revenues are expected to shrink slower than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. The analysts also expect revenues to perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of FM Global Logistics Holdings Berhad's future valuation. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at FM Global Logistics Holdings Berhad.

Looking for more information? At least one of FM Global Logistics Holdings Berhad's twin analysts has provided estimates 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.