As you might know, Chart Industries, Inc. (NASDAQ:GTLS) just kicked off its latest second-quarter results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$310m, some 6.8% above estimates, and statutory earnings per share (EPS) coming in at US$0.57, 41% ahead of expectations. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, Chart Industries' twelve analysts currently expect revenues in 2020 to be US$1.33b, approximately in line with the last 12 months. Per-share earnings are expected to surge 63% to US$2.73. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.28b and earnings per share (EPS) of US$2.17 in 2020. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable lift to earnings per share in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 25% to US$70.79per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Chart Industries, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$32.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 0.03% revenue decline a notable change from historical growth of 6.4% 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 7.4% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Chart Industries is expected to lag the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Chart Industries following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 Chart Industries going out to 2024, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 4 warning signs for Chart Industries that 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.
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