Results: KPJ Healthcare Berhad Beat Earnings Expectations And Analysts Now Have New Forecasts

KPJ Healthcare Berhad (KLSE:KPJ) just released its latest quarterly results and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of RM809m, some 7.7% above estimates, and statutory earnings per share (EPS) coming in at RM0.012, 71% ahead of expectations. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for KPJ Healthcare Berhad


Taking into account the latest results, the most recent consensus for KPJ Healthcare Berhad from 14 analysts is for revenues of RM3.10b in 2023 which, if met, would be a solid 8.7% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 34% to RM0.038. Before this earnings report, the analysts had been forecasting revenues of RM3.09b and earnings per share (EPS) of RM0.036 in 2023. So the consensus seems to have become somewhat more optimistic on KPJ Healthcare Berhad's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.1% to RM1.05. 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. There are some variant perceptions on KPJ Healthcare Berhad, with the most bullish analyst valuing it at RM1.27 and the most bearish at RM0.90 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. For example, we noticed that KPJ Healthcare Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6.9% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 6.4% a year 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 revenue grow 6.5% per year. So while KPJ Healthcare Berhad's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around KPJ Healthcare Berhad's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on KPJ Healthcare Berhad. Long-term earnings power is much more important than next year's profits. We have forecasts for KPJ Healthcare Berhad going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for KPJ Healthcare 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.

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