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Chesapeake Energy (CHK) Flat As Market Sinks: What You Should Know

Zacks Equity Research
Heartland Express (HTLD) delivered earnings and revenue surprises of 8.00% and -3.63%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

In the latest trading session, Chesapeake Energy (CHK) closed at $3.19, marking no change from the previous day. This change was narrower than the S&P 500's daily loss of 0.46%. At the same time, the Dow lost 0.13%, and the tech-heavy Nasdaq lost 0.63%.

Prior to today's trading, shares of the natural gas company had gained 21.29% over the past month. This has outpaced the Oils-Energy sector's gain of 0.78% and the S&P 500's gain of 1.08% in that time.

CHK will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.14, down 58.82% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.10 billion, down 11.84% from the prior-year quarter.

CHK's full-year Zacks Consensus Estimates are calling for earnings of $0.55 per share and revenue of $4.98 billion. These results would represent year-over-year changes of -38.89% and -3.45%, respectively.

It is also important to note the recent changes to analyst estimates for CHK. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 12.72% lower within the past month. CHK is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, CHK is currently trading at a Forward P/E ratio of 5.81. For comparison, its industry has an average Forward P/E of 14.77, which means CHK is trading at a discount to the group.

Also, we should mention that CHK has a PEG ratio of 1.03. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Oil and Gas - Exploration and Production - United States was holding an average PEG ratio of 1.11 at yesterday's closing price.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 184, putting it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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