Coterra Energy Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

The analysts might have been a bit too bullish on Coterra Energy Inc. (NYSE:CTRA), given that the company fell short of expectations when it released its quarterly results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$1.3b, statutory earnings missed forecasts by an incredible 22%, coming in at just US$0.30 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Coterra Energy

Taking into account the latest results, the consensus forecast from Coterra Energy's 15 analysts is for revenues of US$5.70b in 2024. This reflects a reasonable 2.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 5.7% to US$1.87. In the lead-up to this report, the analysts had been modelling revenues of US$5.74b and earnings per share (EPS) of US$1.95 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at US$33.54, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Coterra Energy, with the most bullish analyst valuing it at US$41.00 and the most bearish at US$29.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Coterra Energy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.0% growth on an annualised basis. This is compared to a historical growth rate of 32% 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 1.8% annually. Even after the forecast slowdown in growth, it seems obvious that Coterra Energy is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 estimates - from multiple Coterra Energy analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Coterra Energy 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.

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