Results: Capital Power Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

Capital Power Corporation (TSE:CPX) just released its latest annual results and things are looking bullish. The company beat forecasts, with revenue of CA$3.7b, some 2.3% above estimates, and statutory earnings per share (EPS) coming in at CA$5.15, 25% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Capital Power

Taking into account the latest results, the seven analysts covering Capital Power provided consensus estimates of CA$2.71b revenue in 2025, which would reflect a stressful 26% decline over the past 12 months. Statutory earnings per share are forecast to crater 51% to CA$2.34 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$2.69b and earnings per share (EPS) of CA$2.45 in 2025. 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.

The consensus price target held steady at CA$67.45, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Capital Power at CA$77.00 per share, while the most bearish prices it at CA$62.00. This is a very narrow spread of estimates, implying either that Capital Power is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 26% annualised decline to the end of 2025. That is a notable change from historical growth of 21% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.0% annually for the foreseeable future. It's pretty clear that Capital Power's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Capital Power. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts 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 4 warning signs for Capital Power (1 is a bit 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.