DBS Group Holdings Ltd Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

DBS Group Holdings Ltd (SGX:D05) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 9.9% to hit S$5.6b. DBS Group Holdings also reported a statutory profit of S$4.57, which was an impressive 399% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for DBS Group Holdings

Taking into account the latest results, the most recent consensus for DBS Group Holdings from 17 analysts is for revenues of S$21.2b in 2024. If met, it would imply a satisfactory 4.7% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 2.3% to S$3.73. Before this earnings report, the analysts had been forecasting revenues of S$20.7b and earnings per share (EPS) of S$3.42 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.0% to S$37.86per share. 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 DBS Group Holdings analyst has a price target of S$43.00 per share, while the most pessimistic values it at S$30.00. This shows there is still a bit of 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that DBS Group Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 9.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that DBS Group Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards DBS Group Holdings following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple DBS Group Holdings analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for DBS Group Holdings you should be aware of.

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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.