Civitas Resources, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

It's been a sad week for Civitas Resources, Inc. (NYSE:CIVI), who've watched their investment drop 15% to US$60.51 in the week since the company reported its second-quarter result. It looks like a pretty bad result, all things considered. Although revenues of US$1.3b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 21% to hit US$2.15 per share. 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 Civitas Resources

Taking into account the latest results, the current consensus from Civitas Resources' eight analysts is for revenues of US$5.50b in 2024. This would reflect a decent 15% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 32% to US$11.19. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.50b and earnings per share (EPS) of US$11.38 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$93.57, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Civitas Resources analyst has a price target of US$106 per share, while the most pessimistic values it at US$82.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Civitas Resources is an easy business to forecast or the the analysts are all using similar 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. It's pretty clear that there is an expectation that Civitas Resources' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 31% growth on an annualised basis. This is compared to a historical growth rate of 54% 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 1.9% annually. Even after the forecast slowdown in growth, it seems obvious that Civitas Resources is also expected to grow faster 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 reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$93.57, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Civitas Resources. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Civitas Resources going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 4 warning signs for Civitas Resources that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com