4 days ago
Clearway Energy, Inc. Just Missed Earnings - But Analysts Have Updated Their Models
As you might know, Clearway Energy, Inc. (NYSE:CWEN.A) last week released its latest second-quarter, and things did not turn out so great for shareholders. Results showed a clear earnings miss, with US$392m revenue coming in 8.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.28 missed the mark badly, arriving some 62% below what was expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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Following last week's earnings report, Clearway Energy's ten analysts are forecasting 2025 revenues to be US$1.44b, approximately in line with the last 12 months. Per-share earnings are expected to grow 13% to US$0.73. In the lead-up to this report, the analysts had been modelling revenues of US$1.46b and earnings per share (EPS) of US$0.99 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
View our latest analysis for Clearway Energy
It might be a surprise to learn that the consensus price target was broadly unchanged at US$35.50, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Clearway Energy, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$32.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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 Clearway Energy's revenue growth is expected to slow, with the forecast 1.2% annualised growth rate until the end of 2025 being well below the historical 3.6% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Clearway Energy is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$35.50, with the latest estimates not enough to have an impact on their price targets.
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 Clearway Energy analysts - going out to 2027, and you can see them free on our platform here.
You still need to take note of risks, for example - Clearway Energy has 2 warning signs (and 1 which is potentially serious) we think you should know about.
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