Nestlé (Malaysia) Berhad (KLSE:NESTLE) First-Quarter Results: Here's What Analysts Are Forecasting For This Year

Last week saw the newest first-quarter earnings release from Nestlé (Malaysia) Berhad (KLSE:NESTLE), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of RM1.8b and statutory earnings per share of RM2.81. 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 Nestlé (Malaysia) Berhad

Taking into account the latest results, the consensus forecast from Nestlé (Malaysia) Berhad's twelve analysts is for revenues of RM7.26b in 2024. This reflects an okay 3.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 16% to RM3.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM7.26b and earnings per share (EPS) of RM3.24 in 2024. 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.

The analysts reconfirmed their price target of RM129, showing that the business is executing well and in line with expectations. 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 Nestlé (Malaysia) Berhad, with the most bullish analyst valuing it at RM146 and the most bearish at RM115 per share. This is a very narrow spread of estimates, implying either that Nestlé (Malaysia) Berhad is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 can infer from the latest estimates that forecasts expect a continuation of Nestlé (Malaysia) Berhad'shistorical trends, as the 5.1% annualised revenue growth to the end of 2024 is roughly in line with the 6.2% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.2% annually. So although Nestlé (Malaysia) Berhad is expected to maintain its revenue growth rate, it's only growing at about the rate of 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at RM129, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Nestlé (Malaysia) Berhad. Long-term earnings power is much more important than next year's profits. We have forecasts for Nestlé (Malaysia) Berhad going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Nestlé (Malaysia) 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.