It's been a good week for Chart Industries, Inc. (NASDAQ:GTLS) shareholders, because the company has just released its latest third-quarter results, and the shares gained 5.2% to US$89.01. Results look mixed - while revenue fell marginally short of analyst estimates at US$273m, statutory earnings beat expectations 5.2%, with Chart Industries reporting profits of US$0.60 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the 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 estimates suggest is in store for next year.
Following last week's earnings report, Chart Industries' 14 analysts are forecasting 2021 revenues to be US$1.26b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 76% to US$3.11. Before this earnings report, the analysts had been forecasting revenues of US$1.26b and earnings per share (EPS) of US$2.95 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 12% to US$90.59. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Chart Industries analyst has a price target of US$111 per share, while the most pessimistic values it at US$32.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 0.6% revenue decline a notable change from historical growth of 8.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.4% next year. It's pretty clear that Chart Industries' revenues are expected to perform substantially worse than the wider industry.
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 Chart Industries following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Chart Industries' revenues are expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Chart Industries. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Chart Industries going out to 2024, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 3 warning signs for Chart Industries that you should be aware of.
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. 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.
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