Investors in Kim Loong Resources Berhad (KLSE:KMLOONG) had a good week, as its shares rose 4.5% to close at RM1.84 following the release of its annual results. Results look mixed - while revenue fell marginally short of analyst estimates at RM1.9b, statutory earnings were in line with expectations, at RM0.17 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Kim Loong Resources Berhad

Taking into account the latest results, the current consensus, from the four analysts covering Kim Loong Resources Berhad, is for revenues of RM1.59b in 2024, which would reflect an uneasy 17% reduction in Kim Loong Resources Berhad's sales over the past 12 months. Statutory earnings per share are forecast to dive 25% to RM0.13 in the same period. Before this earnings report, the analysts had been forecasting revenues of RM1.48b and earnings per share (EPS) of RM0.12 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of RM1.77, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Kim Loong Resources Berhad, with the most bullish analyst valuing it at RM1.89 and the most bearish at RM1.65 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Kim Loong Resources Berhad is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 17% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 19% 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 0.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kim Loong Resources Berhad is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kim Loong Resources Berhad's earnings potential next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Kim Loong Resources Berhad analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Kim Loong Resources Berhad (1 can't be ignored!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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