Need To Know: The Consensus Just Cut Its Suria Capital Holdings Berhad (KLSE:SURIA) Estimates For 2022

The latest analyst coverage could presage a bad day for Suria Capital Holdings Berhad (KLSE:SURIA), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the most recent consensus for Suria Capital Holdings Berhad from its three analysts is for revenues of RM418m in 2022 which, if met, would be a sizeable 59% increase on its sales over the past 12 months. Statutory earnings per share are presumed to jump 29% to RM0.13. Prior to this update, the analysts had been forecasting revenues of RM590m and earnings per share (EPS) of RM0.14 in 2022. It looks like analyst sentiment has fallen somewhat in this update, with a pretty serious reduction to revenue estimates and a minor downgrade to earnings per share numbers as well.

See our latest analysis for Suria Capital Holdings Berhad

It'll come as no surprise then, to learn that the analysts have cut their price target 8.2% to RM1.12. 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. The most optimistic Suria Capital Holdings Berhad analyst has a price target of RM1.24 per share, while the most pessimistic values it at RM1.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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. One thing stands out from these estimates, which is that Suria Capital Holdings Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 59% annualised growth until the end of 2022. If achieved, this would be a much better result than the 9.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 12% per year. Not only are Suria Capital Holdings Berhad's revenues expected to improve, it seems that the analysts are also expecting it 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will 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 Suria Capital Holdings Berhad's future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Suria Capital Holdings Berhad after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Suria Capital Holdings Berhad analysts - going out to 2024, and you can see them 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 downgrading 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.