Yahoo Finance SM Energy Company Just Recorded A 12% EPS Beat: Here's What Analysts Are Forecasting Next
It's been a good week for SM Energy Company (NYSE:SM) shareholders, because the company has just released its latest annual results, and the shares gained 4.8% to US$41.42. Revenues were US$2.4b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$6.86 were also better than expected, beating analyst predictions by 12%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for SM Energy
Taking into account the latest results, the consensus forecast from SM Energy's nine analysts is for revenues of US$2.47b in 2024. This reflects an okay 4.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decline 18% to US$5.81 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$2.43b and earnings per share (EPS) of US$5.40 in 2024. So the consensus seems to have become somewhat more optimistic on SM Energy's earnings potential following these results.
The consensus price target was unchanged at US$46.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values SM Energy at US$58.00 per share, while the most bearish prices it at US$38.00. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that SM Energy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 18% 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 1.5% annually. So it's pretty clear that, while SM Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards SM Energy following these results. 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. The consensus price target held steady at US$46.00, 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 SM Energy going out to 2025, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for SM Energy 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.
