Constellation Energy Corporation (NASDAQ:CEG) investors will be delighted, with the company turning in some strong numbers with its latest results. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 20% higher than the analysts had forecast, at US$5.4b, while EPS were US$2.84 beating analyst models by 356%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Constellation Energy

Taking into account the latest results, the six analysts covering Constellation Energy provided consensus estimates of US$23.8b revenue in 2023, which would reflect an uncomfortable 9.7% decline over the past 12 months. Per-share earnings are expected to leap 63% to US$3.92. In the lead-up to this report, the analysts had been modelling revenues of US$22.7b and earnings per share (EPS) of US$3.47 in 2023. So it seems there's been a definite increase in optimism about Constellation Energy's future following the latest results, with a substantial gain in the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$105, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values Constellation Energy at US$125 per share, while the most bearish prices it at US$90.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Constellation Energy shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 18% annualised decline to the end of 2023. That is a notable change from historical growth of 4.8% 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 3.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Constellation Energy is expected to lag 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 Constellation Energy following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Constellation Energy. 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 Constellation Energy going out to 2025, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Constellation Energy that we have uncovered.

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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.