23-02-2025
Kossan Rubber Industries Bhd (KLSE:KOSSAN) Just Reported, And Analysts Assigned A RM2.43 Price Target
There's been a notable change in appetite for Kossan Rubber Industries Bhd (KLSE:KOSSAN) shares in the week since its annual report, with the stock down 18% to RM1.91. Revenues came in 3.7% below expectations, at RM1.9b. Statutory earnings per share were relatively better off, with a per-share profit of RM0.047 being roughly in line with analyst estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kossan Rubber Industries Bhd after the latest results.
View our latest analysis for Kossan Rubber Industries Bhd
Taking into account the latest results, the consensus forecast from Kossan Rubber Industries Bhd's 16 analysts is for revenues of RM2.24b in 2025. This reflects a notable 17% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 30% to RM0.061. Before this earnings report, the analysts had been forecasting revenues of RM2.35b and earnings per share (EPS) of RM0.072 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.
The consensus price target fell 6.7% to RM2.43, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Kossan Rubber Industries Bhd at RM3.35 per share, while the most bearish prices it at RM1.60. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kossan Rubber Industries Bhd's past performance and to peers in the same industry. For example, we noticed that Kossan Rubber Industries Bhd's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 17% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 16% a year 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 grow 14% per year. So it looks like Kossan Rubber Industries Bhd is expected to grow at about the same rate as the wider industry.
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kossan Rubber Industries Bhd. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Kossan Rubber Industries Bhd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Kossan Rubber Industries Bhd analysts - going out to 2027, and you can see them free on our platform here.
You still need to take note of risks, for example - Kossan Rubber Industries Bhd has 3 warning signs (and 2 which are a bit concerning) we think you should know about.
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