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Can Consol Energy (CEIX) Run Higher on Rising Earnings Estimates?

Zacks Equity Research
·2 min read

Consol Energy (CEIX) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this coal company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for Consol Energy, as there has been strong agreement among the covering analysts in raising estimates.

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Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $2.76 per share, which is a change of +3842.86% from the year-ago reported number.

Over the last 30 days, the Zacks Consensus Estimate for Consol Energy has increased 58.62% because one estimate has moved higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $9.55 per share, representing a year-over-year change of +363.59%.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Consol Energy. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 71.76%.

Favorable Zacks Rank

Thanks to promising estimate revisions, Consol Energy currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Consol Energy have attracted decent investments and pushed the stock 24.6% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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Zacks Investment Research