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

Zacks Equity Research
Northrop Grumman (NOC) closed the most recent trading day at $322.16, moving +0.32% from the previous trading session.

In the latest trading session, Chesapeake Energy (CHK) closed at $3.14, marking a -1.88% move from the previous day. This change lagged the S&P 500's daily gain of 0.22%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.6%.

Prior to today's trading, shares of the natural gas company had gained 1.91% over the past month. This has outpaced the Oils-Energy sector's gain of 1.42% and lagged the S&P 500's gain of 2.39% in that time.

Wall Street will be looking for positivity from CHK as it approaches its next earnings report date. In that report, analysts expect CHK to post earnings of $0.14 per share. This would mark a year-over-year decline of 58.82%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.10 billion, down 11.84% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.55 per share and revenue of $4.98 billion, which would represent changes of -38.89% and -3.45%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for CHK. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.18% lower within the past month. CHK is currently a Zacks Rank #3 (Hold).

Looking at its valuation, CHK is holding a Forward P/E ratio of 5.83. Its industry sports an average Forward P/E of 15.12, so we one might conclude that CHK is trading at a discount comparatively.

Investors should also note that CHK has a PEG ratio of 1.03 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CHK's industry had an average PEG ratio of 1.12 as of yesterday's close.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 177, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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