One Kingdom Holding Company (TADAWUL:4280) Analyst Has Been Cutting Their Forecasts

One thing we could say about the covering analyst on Kingdom Holding Company (TADAWUL:4280) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, Kingdom Holding's sole analyst currently expects revenues in 2024 to be ر.س2.6b, approximately in line with the last 12 months. Statutory earnings per share are presumed to accumulate 7.1% to ر.س0.30. Prior to this update, the analyst had been forecasting revenues of ر.س2.9b and earnings per share (EPS) of ر.س0.31 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

View our latest analysis for Kingdom Holding

The consensus price target fell 8.9% to ر.س6.07, with the weaker earnings outlook clearly leading analyst valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.8% by the end of 2024. This indicates a significant reduction from annual growth of 7.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.1% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kingdom Holding is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Kingdom Holding. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Kingdom Holding's revenues are expected to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Kingdom Holding going forwards.

There might be good reason for analyst bearishness towards Kingdom Holding, like the risk of cutting its dividend. Learn more, and discover the 1 other warning sign we've identified, 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 downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.