Yahoo Finance British American Tobacco (Malaysia) Berhad Just Missed Earnings - But Analysts Have Updated Their Models
It's shaping up to be a tough period for British American Tobacco (Malaysia) Berhad (KLSE:BAT), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 2.7% short of analyst estimates at RM2.3b, and statutory earnings of RM0.68 per share missed forecasts by 5.0%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on British American Tobacco (Malaysia) Berhad after the latest results.
See our latest analysis for British American Tobacco (Malaysia) Berhad
After the latest results, the four analysts covering British American Tobacco (Malaysia) Berhad are now predicting revenues of RM2.38b in 2024. If met, this would reflect a reasonable 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 7.9% to RM0.74. Before this earnings report, the analysts had been forecasting revenues of RM2.40b and earnings per share (EPS) of RM0.77 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target fell 6.4% to RM9.02, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. Currently, the most bullish analyst values British American Tobacco (Malaysia) Berhad at RM10.40 per share, while the most bearish prices it at RM7.55. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await British American Tobacco (Malaysia) Berhad shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 3.0% growth on an annualised basis. That is in line with its 3.4% annual growth 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 revenues grow 7.0% per year. So it's pretty clear that British American Tobacco (Malaysia) Berhad is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for British American Tobacco (Malaysia) Berhad going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for British American Tobacco (Malaysia) Berhad that 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.
