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Continental Resources, Inc. (NYSE:CLR): Set To Experience A Decrease In Earnings?

Simply Wall St

After Continental Resources, Inc.'s (NYSE:CLR) recent earnings announcement in March 2019, it seems that analyst forecasts are fairly pessimistic, with profits predicted to drop by 3.2% next year against the past 5-year average growth rate of 13%. Currently with a trailing-twelve-month profit of US$988m, the consensus growth rate suggests that earnings will drop to US$957m by 2020. Below is a brief commentary on the longer term outlook the market has for Continental Resources. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Continental Resources

How is Continental Resources going to perform in the near future?

The view from 19 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for CLR, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:CLR Past and Future Earnings, August 5th 2019

This results in an annual growth rate of 16% based on the most recent earnings level of US$988m to the final forecast of US$1.3b by 2022. This leads to an EPS of $3.32 in the final year of projections relative to the current EPS of $2.66. Margins are currently sitting at 23%, approximately the same as previous years. With analysts forecasting revenue growth of 0.36803 and CLR's net income growth expected to roughly track that, this company may add value for shareholders over time.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Continental Resources, there are three essential aspects you should further research:

  1. 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.
  2. Valuation: What is Continental Resources worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Continental Resources is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Continental Resources? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.