Keyfield International Berhad (KLSE:KEYFIELD) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 6.8% over the past week, closing at RM2.82. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
After the upgrade, the consensus from Keyfield International Berhad's dual analysts is for revenues of RM523m in 2024, which would reflect a definite 8.9% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to descend 12% to RM0.18 in the same period. Previously, the analysts had been modelling revenues of RM469m and earnings per share (EPS) of RM0.16 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Check out our latest analysis for Keyfield International Berhad
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of RM2.64, suggesting that the forecast performance does not have a long term impact on the company's valuation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 8.9% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 74% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 5.4% annually for the foreseeable future. The forecasts do look bearish for Keyfield International Berhad, since they're expecting it to shrink faster than the industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Keyfield International Berhad could be a good candidate for more research.