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Bearish: Analysts Just Cut Their Chesapeake Energy Corporation (NASDAQ:CHK) Revenue and EPS estimates

The latest analyst coverage could presage a bad day for Chesapeake Energy Corporation (NASDAQ:CHK), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from four analysts covering Chesapeake Energy is for revenues of US$3.8b in 2024, implying a painful 37% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to tumble 82% to US$3.28 in the same period. Before this latest update, the analysts had been forecasting revenues of US$5.0b and earnings per share (EPS) of US$4.20 in 2024. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Chesapeake Energy

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earnings-and-revenue-growth

Despite the cuts to forecast earnings, there was no real change to the US$102 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 37% by the end of 2024. This indicates a significant reduction from annual growth of 4.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.9% annually for the foreseeable future. It's pretty clear that Chesapeake Energy's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Chesapeake Energy. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Chesapeake Energy's revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Chesapeake Energy.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Chesapeake Energy analysts - going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.