Brokers Are Upgrading Their Views On Malakoff Corporation Berhad (KLSE:MALAKOF) With These New Forecasts

Malakoff Corporation Berhad (KLSE:MALAKOF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the most recent consensus for Malakoff Corporation Berhad from its nine analysts is for revenues of RM8.2b in 2022 which, if met, would be a reasonable 6.1% increase on its sales over the past 12 months. Statutory earnings per share are presumed to soar 57% to RM0.081. Before this latest update, the analysts had been forecasting revenues of RM7.0b and earnings per share (EPS) of RM0.064 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Our analysis indicates that MALAKOF is potentially undervalued!

With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.2% to RM0.87 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Malakoff Corporation Berhad at RM1.05 per share, while the most bearish prices it at RM0.54. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Malakoff Corporation Berhad's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Malakoff Corporation Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.1% annualised growth until the end of 2022. If achieved, this would be a much better result than the 1.8% 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 11% per year. Although Malakoff Corporation Berhad's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader 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. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Malakoff Corporation Berhad could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Malakoff Corporation 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 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.