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It's shaping up to be a tough period for Coterra Energy Inc. (NYSE:CTRA), which a week ago released some disappointing second-quarter results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with US$1.3b revenue coming in 3.0% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.30 missed the mark badly, arriving some 22% below what was expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Coterra Energy after the latest results.
See our latest analysis for Coterra Energy
After the latest results, the 15 analysts covering Coterra Energy are now predicting revenues of US$5.70b in 2024. If met, this would reflect an okay 2.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 5.7% to US$1.87. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.74b and earnings per share (EPS) of US$1.95 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$33.54, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Coterra Energy analyst has a price target of US$41.00 per share, while the most pessimistic values it at US$29.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Coterra Energy shareholders.
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. It's pretty clear that there is an expectation that Coterra Energy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.0% growth on an annualised basis. This is compared to a historical growth rate of 32% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.8% annually. Even after the forecast slowdown in growth, it seems obvious that Coterra Energy is also expected to grow faster than the wider industry.