Shareholders in Guan Chong Berhad (KLSE:GCB) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term 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 9.0% over the past week, closing at RM2.79. Could this big upgrade push the stock even higher?

Following the upgrade, the latest consensus from Guan Chong Berhad's three analysts is for revenues of RM8.7b in 2024, which would reflect a substantial 62% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 141% to RM0.21. Previously, the analysts had been modelling revenues of RM7.2b 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.

See our latest analysis for Guan Chong Berhad

With these upgrades, we're not surprised to see that the analysts have lifted their price target 29% to RM2.94 per share.

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. The analysts are definitely expecting Guan Chong Berhad's growth to accelerate, with the forecast 62% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Guan Chong Berhad is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Guan Chong Berhad.

Analysts are clearly in love with Guan Chong Berhad at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as its declining profit margins. For more information, you can click through to our platform to learn more about this and the 1 other flag we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.