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Here's What Analysts Are Forecasting For Chesapeake Utilities Corporation (NYSE:CPK) After Its Full-Year Results

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Simply Wall St
·4 min read
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Investors in Chesapeake Utilities Corporation (NYSE:CPK) had a good week, as its shares rose 3.1% to close at US$106 following the release of its yearly results. Chesapeake Utilities missed revenue estimates by 4.3%, with sales of US$488m, although statutory earnings per share (EPS) of US$4.26 beat expectations, coming in 3.0% ahead of analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Chesapeake Utilities

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from Chesapeake Utilities' four analysts is for revenues of US$609.3m in 2021, which would reflect a huge 25% improvement in sales compared to the last 12 months. Per-share earnings are expected to increase 9.3% to US$4.62. Before this earnings report, the analysts had been forecasting revenues of US$566.8m and earnings per share (EPS) of US$4.53 in 2021. There doesn't appear to have been a major change in sentiment following the results, other than the modest lift to revenue estimates.

Even though revenue forecasts increased, there was no change to the consensus price target of US$111, suggesting the analysts are focused on earnings as the driver of value creation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Chesapeake Utilities, with the most bullish analyst valuing it at US$127 and the most bearish at US$96.00 per share. This is a very narrow spread of estimates, implying either that Chesapeake Utilities is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Chesapeake Utilities is forecast to grow faster in the future than it has in the past, with revenues expected to grow 25%. If achieved, this would be a much better result than the 0.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 1.5% per year. So it looks like Chesapeake Utilities is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Chesapeake Utilities going out to 2023, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Chesapeake Utilities (1 makes us a bit uncomfortable) you should be aware of.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.