Time To Worry? Analysts Are Downgrading Their Wasco Berhad (KLSE:WASCO) Outlook
Today is shaping up negative for Wasco Berhad (KLSE:WASCO) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Shares are up 8.6% to RM0.76 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the latest downgrade, the current consensus, from the six analysts covering Wasco Berhad, is for revenues of RM2.1b in 2026, which would reflect a noticeable 2.3% reduction in Wasco Berhad's sales over the past 12 months. Statutory earnings per share are supposed to crater 49% to RM0.087 in the same period. Prior to this update, the analysts had been forecasting revenues of RM2.4b and earnings per share (EPS) of RM0.12 in 2026. Indeed, we can see that the analysts are a lot more bearish about Wasco Berhad's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
See our latest analysis for Wasco Berhad
It'll come as no surprise then, to learn that the analysts have cut their price target 13% to RM1.13.
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 3.1% annualised revenue decline to the end of 2026. That is a notable change from historical growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.4% per year. It's pretty clear that Wasco Berhad's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Wasco Berhad. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Wasco Berhad's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Wasco Berhad analysts - going out to 2028, and you can see them free on our platform here.
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 backed by insiders.
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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.