Celebrations may be in order for Coastal Contracts Bhd (KLSE:COASTAL) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with the analyst now much more optimistic on its sales pipeline.
Following the upgrade, the current forecast from Coastal Contracts Bhd's single analyst is for revenues of RM430m in 2026, which would reflect a major improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of RM0.39 per share this year. Previously, the analyst had been modelling revenues of RM330m and earnings per share (EPS) of RM0.36 in 2026. The forecasts seem more optimistic now, with a chunky increase in revenue and a modest lift to earnings per share estimates.
See our latest analysis for Coastal Contracts Bhd
Although the analyst has upgraded their earnings estimates, there was no change to the consensus price target of RM2.15, suggesting that the forecast performance does not have a long term impact on the company's valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Coastal Contracts Bhd is forecast to grow faster in the future than it has in the past, with revenues expected to display 8x annualised growth until the end of 2026. If achieved, this would be a much better result than the 21% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 17% per year. Not only are Coastal Contracts Bhd's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the analyst appears to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Coastal Contracts Bhd.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2028, which can be seen for 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.