Yahoo Finance Cabot Oil & Gas Corporation Just Released Its Full-Year Results And Analysts Are Updating Their Estimates
Last week saw the newest yearly earnings release from Cabot Oil & Gas Corporation (NYSE:COG), an important milestone in the company's journey to build a stronger business. Cabot Oil & Gas reported US$2.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.64 beat expectations, being 4.0% higher than what analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Cabot Oil & Gas
Taking into account the latest results, the current consensus, from the 16 analysts covering Cabot Oil & Gas, is for revenues of US$1.76b in 2020, which would reflect a considerable 15% reduction in Cabot Oil & Gas's sales over the past 12 months. Statutory earnings per share are expected to plummet 50% to US$0.81 in the same period. Before this earnings report, analysts had been forecasting revenues of US$1.81b and earnings per share (EPS) of US$0.89 in 2020. Analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
Analysts made no major changes to their price target of US$18.36, suggesting the downgrades are not expected to have a long-term impact on Cabot Oil & Gas's valuation. 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. Currently, the most bullish analyst values Cabot Oil & Gas at US$23.00 per share, while the most bearish prices it at US$12.00. This shows there is still quite 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.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 15% a significant reduction from annual growth of 9.1% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 4.5% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Cabot Oil & Gas to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at US$18.36, with the latest estimates not enough to have an impact on analysts' estimated valuations.
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 Cabot Oil & Gas going out to 2023, and you can see them free on our platform here..
You can also see whether Cabot Oil & Gas is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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