Sime Darby Berhad Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Last week, you might have seen that Sime Darby Berhad (KLSE:SIME) released its full-year result to the market. The early response was not positive, with shares down 4.4% to RM2.38 in the past week. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at RM69b, statutory earnings beat expectations by a notable 27%, coming in at RM0.26 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Sime Darby Berhad's 15 analysts are now forecasting revenues of RM71.3b in 2027. This would be a modest 2.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to drop 10% to RM0.23 in the same period. In the lead-up to this report, the analysts had been modelling revenues of RM71.3b and earnings per share (EPS) of RM0.23 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for Sime Darby Berhad
It will come as no surprise then, to learn that the consensus price target is largely unchanged at RM2.70. 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 Sime Darby Berhad, with the most bullish analyst valuing it at RM3.33 and the most bearish at RM2.05 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Sime Darby Berhad's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 2.6% growth on an annualised basis. This is compared to a historical growth rate of 13% 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 shrink 7.4% per year. So it's clear that despite the slowdown in growth, Sime Darby Berhad is still expected to grow meaningfully faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, they made no changes to their revenue estimates - and they expect it to perform better 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Sime Darby Berhad. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Sime Darby Berhad going out to 2029, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Sime Darby Berhad that we have uncovered.
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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.