Shareholders of Constellation Energy Corporation (NASDAQ:CEG) will be pleased this week, given that the stock price is up 10% to US$215 following its latest first-quarter results. Revenues of US$6.2b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of US$2.78 an impressive 81% ahead of 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, Constellation Energy's seven analysts are forecasting 2024 revenues to be US$23.1b, approximately in line with the last 12 months. Statutory per share are forecast to be US$7.61, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$19.8b and earnings per share (EPS) of US$7.61 in 2024. There's clearly been a surge in bullishness around the company's revenue pipeline, even if there's no real change in earnings per share forecasts.
The analysts increased their price target 13% to US$207, perhaps signalling that higher revenues are a strong leading indicator for Constellation Energy's valuation. 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. The most optimistic Constellation Energy analyst has a price target of US$242 per share, while the most pessimistic values it at US$116. 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 revenue is expected to reverse, with a forecast 2.4% annualised decline to the end of 2024. That is a notable change from historical growth of 7.4% 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 3.9% 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 most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 Constellation Energy going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Constellation Energy that we have uncovered.
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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.