CVR Energy, Inc. (NYSE:CVI) shareholders are probably feeling a little disappointed, since its shares fell 7.0% to US$25.48 in the week after its latest quarterly results. CVR Energy beat expectations by 9.5% with revenues of US$2.0b. It also surprised on the earnings front, with an unexpected statutory profit of US$0.21 per share a nice improvement on the losses that the analysts forecast. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for CVR Energy

Following the recent earnings report, the consensus from six analysts covering CVR Energy is for revenues of US$7.60b in 2024. This implies an uneasy 11% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to tumble 70% to US$1.62 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$7.76b and earnings per share (EPS) of US$0.92 in 2024. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the considerable lift to to the earnings per share numbers.

There's been no real change to the average price target of US$27.13, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on CVR Energy, with the most bullish analyst valuing it at US$33.75 and the most bearish at US$25.00 per share. 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. We would highlight that revenue is expected to reverse, with a forecast 21% annualised decline to the end of 2024. That is a notable change from historical growth of 14% 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 2.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CVR Energy is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around CVR Energy's earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple CVR Energy analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with CVR Energy (at least 1 which makes us a bit uncomfortable) , and understanding these should be part of your investment process.

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.

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