Yahoo Finance CMS Energy Corporation Just Beat EPS By 5.1%: Here's What Analysts Think Will Happen Next
Last week saw the newest first-quarter earnings release from CMS Energy Corporation (NYSE:CMS), an important milestone in the company's journey to build a stronger business. Revenues of US$2.2b came up short as it was 11% below what the analysts had predicted. Profits didn't suffer quite so much, with statutory per-share earnings of US$0.96 being coming in 5.1% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CMS Energy after the latest results.
See our latest analysis for CMS Energy
After the latest results, the twelve analysts covering CMS Energy are now predicting revenues of US$8.32b in 2024. If met, this would reflect a decent 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 4.8% to US$3.37. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$8.34b and earnings per share (EPS) of US$3.33 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$63.29, showing that the business is executing well and in line with expectations. 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. The most optimistic CMS Energy analyst has a price target of US$68.00 per share, while the most pessimistic values it at US$55.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting CMS 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 CMS Energy's past performance and to peers in the same industry. It's clear from the latest estimates that CMS Energy's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CMS Energy to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share 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. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on CMS Energy. Long-term earnings power is much more important than next year's profits. We have forecasts for CMS Energy going out to 2026, and you can see them free on our platform here.
Even so, be aware that CMS Energy is showing 3 warning signs in our investment analysis , and 1 of those is a bit unpleasant...
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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.
