Capital Power Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Capital Power Corporation (TSE:CPX) just released its latest quarterly results and things are looking bullish. Statutory revenue of CA$988m and earnings of CA$1.03 both blasted past expectations, beating expectations by 29% and 78%, respectively, ahead of expectations. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

We've discovered 5 warning signs about Capital Power. View them for free.

After the latest results, the consensus from Capital Power's six analysts is for revenues of CA$2.96b in 2025, which would reflect a definite 17% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to crater 23% to CA$3.04 in the same period. Before this earnings report, the analysts had been forecasting revenues of CA$2.31b and earnings per share (EPS) of CA$2.98 in 2025. Sentiment certainly seems to have improved after the latest results, with a sizeable gain to revenue and a small increase to earnings per share estimates.

View our latest analysis for Capital Power

Despite these upgrades,the analysts have not made any major changes to their price target of CA$64.55, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Capital Power, with the most bullish analyst valuing it at CA$76.00 and the most bearish at CA$58.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. We would highlight that revenue is expected to reverse, with a forecast 21% annualised decline to the end of 2025. That is a notable change from historical growth of 20% 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 3.6% per year. It's pretty clear that Capital Power's revenues are expected to perform substantially worse than 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 Capital Power following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at CA$64.55, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Capital Power going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 5 warning signs for Capital Power (1 is concerning!) 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.