Earnings Beat: Frencken Group Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Frencken Group Limited (SGX:E28) just released its full-year report and things are looking bullish. The company beat forecasts, with revenue of S$743m, some 3.2% above estimates, and statutory earnings per share (EPS) coming in at S$0.076, 27% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Frencken Group after the latest results.

See our latest analysis for Frencken Group

Taking into account the latest results, the consensus forecast from Frencken Group's five analysts is for revenues of S$822.1m in 2024. This reflects a decent 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 46% to S$0.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$794.9m and earnings per share (EPS) of S$0.10 in 2024. So it seems there's been a definite increase in optimism about Frencken Group's future following the latest results, with a decent improvement in the earnings per share forecasts in particular.

It will come as no surprise to learn that the analysts have increased their price target for Frencken Group 20% to S$1.78on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Frencken Group at S$1.90 per share, while the most bearish prices it at S$1.70. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Frencken Group's growth to accelerate, with the forecast 11% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. Frencken Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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 Frencken Group following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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. At Simply Wall St, we have a full range of analyst estimates for Frencken Group going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Frencken Group that you need to be mindful 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.