Forecast: Analysts Think CNX Resources Corporation's (NYSE:CNX) Business Prospects Have Improved Drastically

Celebrations may be in order for CNX Resources Corporation (NYSE:CNX) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 8.0% over the past week, closing at US$19.93. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following this upgrade, CNX Resources' seven analysts are forecasting 2023 revenues to be US$2.8b, approximately in line with the last 12 months. Statutory earnings per share are anticipated to tumble 49% to US$6.07 in the same period. Prior to this update, the analysts had been forecasting revenues of US$2.6b and earnings per share (EPS) of US$4.66 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for CNX Resources

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$19.09, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on CNX Resources, with the most bullish analyst valuing it at US$28.00 and the most bearish at US$16.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.8% by the end of 2023. This indicates a significant reduction from annual growth of 21% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 4.4% per year. So it's pretty clear that CNX Resources' revenues are expected to shrink slower than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So CNX Resources could be a good candidate for more research.

Analysts are definitely bullish on CNX Resources, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a weak balance sheet. You can learn more, and discover the 1 other risk we've identified, for free on our platform here.

You can also see our analysis of CNX Resources' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.