As you might know, Chevron Corporation (NYSE:CVX) last week released its latest yearly, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$140b, statutory earnings missed forecasts by an incredible 77%, coming in at just US$1.54 per share. 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 gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Following the latest results, Chevron's 13 analysts are now forecasting revenues of US$150.4b in 2020. This would be a credible 7.5% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to leap 314% to US$6.43. Before this earnings report, analysts had been forecasting revenues of US$150.5b and earnings per share (EPS) of US$6.50 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.
There were no changes to revenue or earnings estimates or the price target of US$133, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Chevron at US$151 per share, while the most bearish prices it at US$106. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Chevron's rate of growth is expected to accelerate meaningfully, with forecast 7.5% revenue growth noticeably faster than its historical growth of 0.3%p.a. 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 4.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Chevron to grow faster than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. 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$133, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Chevron going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Chevron's balance sheet, and whether we think Chevron is carrying too much debt, for free on our platform here.
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