NorthWestern Energy (NWE) Earnings Preview: What to Expect on October 28th
NorthWestern Energy (NWE) is gearing up to unveil its latest quarterly earnings report on Monday, October 28th, 2024. This announcement holds significant weight for investors, who are keenly interested in seeing whether NorthWestern can surpass analyst estimates and deliver favorable guidance for the upcoming quarter.
Analyst Expectations and Past Performance
Analysts project that NorthWestern will report earnings per share (EPS) of $0.71. This follows a pattern of exceeding expectations in the previous quarter, where the company reported an EPS beat by $0.01, resulting in a 0.49% increase in the share price on the subsequent day.
Looking back at NorthWestern’s past performance, the company has demonstrated a history of mixed results. Here’s a breakdown of the company’s earnings performance and resulting stock price changes over the last four quarters:
| Quarter | EPS Estimate | EPS Actual | Price Change % |
|———-|————–|————|—————-|
| Q2 2024 | 0.52 | 0.53 | 0.0% |
| Q1 2024 | 1.13 | 1.09 | -1.0% |
| Q4 2023 | 1.17 | 1.38 | 5.0% |
| Q3 2023 | 0.59 | 0.49 | -2.0% |
As of October 24th, NorthWestern’s shares were trading at $55.1. Over the past 52 weeks, the company’s shares have seen a positive 16.17% gain. This consistent growth has likely fueled bullish sentiment among long-term shareholders heading into this earnings release.
Analyst Insights and Peer Comparisons
To gain a comprehensive understanding of NorthWestern’s prospects, it’s crucial to consider the insights shared by analysts. The consensus rating for NorthWestern is Neutral, based on 6 analyst ratings. This suggests a balanced outlook, with no strong bias towards bullish or bearish sentiment. The average one-year price target for NorthWestern is $58.83, indicating a potential 6.77% upside.
To further contextualize NorthWestern’s performance, let’s compare it to three prominent industry players: Avista, Black Hills, and NiSource.
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Avista:
Analysts hold an Underperform consensus rating for Avista, with an average one-year price target of $37.0, suggesting a potential 32.85% downside.*
Black Hills:
Analysts have assigned a Neutral consensus rating to Black Hills, with an average one-year price target of $63.5, implying a potential 15.25% upside.*
NiSource:
Analysts maintain an Outperform status for NiSource, with an average one-year price target of $36.57, indicating a potential 33.63% downside.Key Financial Metrics and Comparative Analysis
A deeper dive into key financial metrics reveals NorthWestern’s strengths and weaknesses in comparison to its peers.
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|———————-|———–|—————-|—————|—————–|
| NorthWestern Energy | Neutral | 10.13% | $186.08M | 1.13% |
| Avista | Underperform | 5.83% | $257.75M | 0.91% |
| Black Hills | Neutral | -2.12% | $153.80M | 0.68% |
| NiSource | Outperform | -0.49% | $562.30M | 1.09% |
Key Takeaways:
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Revenue Growth:
NorthWestern ranks at the top among its peers for revenue growth. This indicates a strong ability to increase top-line earnings.*
Gross Profit:
NorthWestern sits in the middle of the pack in terms of gross profit, indicating a decent ability to manage operational costs.*
Return on Equity (ROE):
NorthWestern ranks highest in terms of ROE, suggesting efficient use of equity capital for generating returns for shareholders.About NorthWestern Energy
NorthWestern Energy Group Inc. is a leading provider of electricity and natural gas services in the Upper Midwest and Northwest of the U.S., operating in the states of Montana, South Dakota, Nebraska, and Yellowstone National Park. The company’s operations are divided into two primary segments:
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Electric Utility Operations:
This segment encompasses the generation, purchase, transmission, and distribution of electricity.*
Natural Gas Utility Operations:
This segment covers the production, purchase, transmission, storage, and distribution of natural gas.The company utilizes a diverse mix of energy sources, including thermal, wind, hydro, and renewable energy, to generate power, depending on the location of its facilities. The majority of NorthWestern’s revenue is derived from its Electric Utility Operations segment.
Economic Impact and Financial Performance
NorthWestern’s financial performance paints a mixed picture. The company has a restricted market capitalization, placing it below industry averages, indicating a smaller scale relative to its peers. However, NorthWestern has shown positive revenue growth in the past three months, achieving a solid 10.13% rate as of June 30, 2024. This growth rate outpaces the average among its peers in the Utilities sector.
Despite the positive revenue growth, NorthWestern’s net margin falls below industry averages, suggesting challenges in maintaining strong profitability. The company’s net margin of 9.89% might point to difficulties in effective cost management. Additionally, NorthWestern’s ROE and ROA (Return on Assets) are below industry standards, suggesting issues in efficiently utilizing equity capital and assets to generate satisfactory returns for shareholders.
On the positive side, NorthWestern’s debt management is balanced, with a debt-to-equity ratio below industry norms, standing at 1.03.
Key Takeaways
Investors should pay close attention to NorthWestern’s earnings release on October 28th, 2024, as it offers valuable insights into the company’s future trajectory. While NorthWestern has demonstrated solid revenue growth and strong ROE, challenges remain in profitability, efficient asset utilization, and managing debt effectively. The upcoming earnings report will shed light on the company’s progress in addressing these challenges and its overall performance in the coming quarters.
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