Constellation Energy Corporation Just Missed Earnings - But Analysts Have Updated Their Models
The investors in Constellation Energy Corporation's (NASDAQ:CEG) will be rubbing their hands together with glee today, after the share price leapt 26% to US$168 in the week following its yearly results. Statutory earnings per share of US$5.01 unfortunately missed expectations by 19%, although it was encouraging to see revenues of US$25b exceed expectations by 3.6%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Constellation Energy
Taking into account the latest results, the seven analysts covering Constellation Energy provided consensus estimates of US$18.6b revenue in 2024, which would reflect a stressful 25% decline over the past 12 months. Per-share earnings are expected to soar 46% to US$7.50. In the lead-up to this report, the analysts had been modelling revenues of US$19.5b and earnings per share (EPS) of US$6.18 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a sizeable expansion in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.
There's been a 9.9% lift in the price target to US$148, with the analysts signalling that the higher earnings forecasts are more relevant to the business than the weaker revenue 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. There are some variant perceptions on Constellation Energy, with the most bullish analyst valuing it at US$190 and the most bearish at US$116 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 25% by the end of 2024. This indicates a significant reduction from annual growth of 6.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.4% per year. It's pretty clear that Constellation Energy's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Constellation Energy's earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Constellation Energy 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 2 warning signs for Constellation Energy you should be aware of.
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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.
