Yahoo Finance Revenue Beat: Sarawak Oil Palms Berhad Beat Analyst Estimates By 26%
Sarawak Oil Palms Berhad (KLSE:SOP) investors will be delighted, with the company turning in some strong numbers with its latest results. Performance was better than the analysts expected, with revenues of RM5.1b coming in26% ahead of expectations, and statutory earnings per share (EPS) of RM0.34 exceeding forecasts by 16%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sarawak Oil Palms Berhad after the latest results.
View our latest analysis for Sarawak Oil Palms Berhad
Following the recent earnings report, the consensus from four analysts covering Sarawak Oil Palms Berhad is for revenues of RM4.61b in 2024. This implies an uncomfortable 10% decline in revenue compared to the last 12 months. Per-share earnings are expected to increase 8.5% to RM0.37. In the lead-up to this report, the analysts had been modelling revenues of RM3.96b and earnings per share (EPS) of RM0.33 in 2024. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Despite these upgrades,the analysts have not made any major changes to their price target of RM3.03, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sarawak Oil Palms Berhad, with the most bullish analyst valuing it at RM3.20 and the most bearish at RM2.74 per share. This is a very narrow spread of estimates, implying either that Sarawak Oil Palms Berhad is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 10% by the end of 2024. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. It's pretty clear that Sarawak Oil Palms Berhad's revenues are expected to perform substantially worse than the wider industry.
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 Sarawak Oil Palms Berhad following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Sarawak Oil Palms Berhad going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 3 warning signs for Sarawak Oil Palms Berhad (1 can't be ignored!) that you need to take into consideration.
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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.
