Will Chesapeake Utilities Corporation’s (NYSE:CPK) Earnings Grow In Next 12 Months?
On 30 September 2018, Chesapeake Utilities Corporation (NYSE:CPK) released its most recent earnings update. Generally, the consensus outlook from analysts appear bearish, as a -6.1% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at US$65m, we should see this fall to US$61m by 2019. Below is a brief commentary on the longer term outlook the market has for Chesapeake Utilities. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for Chesapeake Utilities
How is Chesapeake Utilities going to perform in the near future?
The view from 4 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of CPK’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of US$58m and the final forecast of US$62m by 2021, the annual rate of growth for CPK’s earnings is 4.9%. EPS reaches $3.98 in the final year of forecast compared to the current $3.56 EPS today. The bottom-line growth seems to be caused by cost cutting activities, as revenues is expected to grow much slower than earnings. In 2021, CPK’s profit margin will have expanded from 9.4% to 9.6%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Chesapeake Utilities, I’ve compiled three pertinent aspects you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Future Earnings: How does Chesapeake Utilities’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Chesapeake Utilities? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
