Keppel Ltd. (SGX:BN4) shareholders are probably feeling a little disappointed, since its shares fell 5.5% to S$6.22 in the week after its latest half-year results. Revenues were S$3.2b, 20% shy of what the analysts were expecting, although statutory earnings of S$0.49 per share were roughly in line with what was forecast. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

After the latest results, the eleven analysts covering Keppel are now predicting revenues of S$7.02b in 2024. If met, this would reflect a decent 8.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 24% to S$0.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$7.28b and earnings per share (EPS) of S$0.55 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of S$8.16, suggesting the downgrades are not expected to have a long-term impact on Keppel's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Keppel, with the most bullish analyst valuing it at S$9.00 and the most bearish at S$6.05 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Keppel's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 18% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.7% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.2% annually. Not only are Keppel's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Keppel. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Keppel analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 4 warning signs for Keppel you should be aware of, and 1 of them is concerning.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com