Will Continental Resources, Inc.’s (NYSE:CLR) Earnings Grow In The Next 12 Months?

In March 2019, Continental Resources, Inc. (NYSE:CLR) announced its earnings update. Overall, analyst consensus outlook appear cautiously subdued, as a 0.02% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at US$988m, we should see this growing to US$989m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for Continental Resources

What can we expect from Continental Resources in the longer term?

The longer term expectations from the 19 analysts of CLR is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of CLR’s earnings growth over these next few years.

NYSE:CLR Past and Future Earnings, July 29th 2019
NYSE:CLR Past and Future Earnings, July 29th 2019

From the current net income level of US$988m and the final forecast of US$1.3b by 2022, the annual rate of growth for CLR’s earnings is 15%. 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 relevant aspects you should further examine:

  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.