Market forces rained on the parade of Malaysian Resources Corporation Berhad( KLSE:MRCB ) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After the downgrade, the five analysts covering Malaysian Resources Corporation Berhad are now predicting revenues of RM1.6b in 2025. If met, this would reflect a sizeable 31% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of RM1.8b in 2025. The consensus view seems to have become more pessimistic on Malaysian Resources Corporation Berhad, noting the substantial drop in revenue estimates in this update.
Check out our latest analysis for Malaysian Resources Corporation Berhad
Notably, the analysts have cut their price target 5.6% to RM0.54, suggesting concerns around Malaysian Resources Corporation Berhad's valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Malaysian Resources Corporation Berhad's growth to accelerate, with the forecast 31% annualised growth to the end of 2025 ranking favourably alongside historical growth of 4.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Malaysian Resources Corporation Berhad to grow faster than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Malaysian Resources Corporation Berhad this year. The analysts also expect revenues to grow faster 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 Malaysian Resources Corporation Berhad going forwards.
There might be good reason for analyst bearishness towards Malaysian Resources Corporation Berhad, like its declining profit margins. Learn more, and discover the 2 other risks we've identified, for free on our platform here.
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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.
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