Earnings Miss: Clearway Energy, Inc. Missed EPS By 35% And Analysts Are Revising Their Forecasts

Clearway Energy, Inc. (NYSE:CWEN.A) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Unfortunately, Clearway Energy delivered a serious earnings miss. Revenues of US$366m were 14% below expectations, and statutory earnings per share of US$0.43 missed estimates by 35%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Clearway Energy

Taking into account the latest results, the current consensus from Clearway Energy's six analysts is for revenues of US$1.33b in 2024. This would reflect a modest 6.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 54% to US$1.18. In the lead-up to this report, the analysts had been modelling revenues of US$1.39b and earnings per share (EPS) of US$1.20 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at US$31.50even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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. The most optimistic Clearway Energy analyst has a price target of US$34.00 per share, while the most pessimistic values it at US$26.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Clearway Energy is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Clearway Energy's past performance and to peers in the same industry. The analysts are definitely expecting Clearway Energy's growth to accelerate, with the forecast 14% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Clearway Energy 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$31.50, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Clearway Energy going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 3 warning signs for Clearway Energy (1 is significant!) that you should be aware of.

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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.

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