There's been a notable change in appetite for Cheniere Energy, Inc. (NYSEMKT:LNG) shares in the week since its full-year report, with the stock down 13% to US$48.27. Although revenues of US$9.3b were in line with analyst expectations, Cheniere Energy surprised on the earnings front, with an unexpected (statutory) profit of US$2.51 per share a nice improvement on the losses that analysts forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Cheniere Energy's twelve analysts is for revenues of US$10.9b in 2020, which would reflect a decent 17% increase on its sales over the past 12 months. Statutory earnings per share are expected to dip 9.9% to US$2.28 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$11.0b and earnings per share (EPS) of US$2.31 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$77.29. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Cheniere Energy analyst has a price target of US$87.00 per share, while the most pessimistic values it at US$63.00. 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.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Cheniere Energy's performance in recent years. It's pretty clear that analysts expect Cheniere Energy's revenue growth will slow down substantially, with revenues next year expected to grow 17%, compared to a historical growth rate of 55% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 4.5% next year. So it's pretty clear that, while Cheniere Energy's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$77.29, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Cheniere Energy going out to 2024, and you can see them free on our platform here.
It might also be worth considering whether Cheniere Energy's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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