Chesapeake Energy Q3 Earnings Preview: Natural Gas Potential Meets Balance Sheet Concerns

Oklahoma City-based energy company, Chesapeake Energy Corp CHK, is scheduled to report its third-quarter earnings after the bell on Oct. 31.

The company is primarily engaged in the exploration, development, and production of natural gas and oil. At its peak, Chesapeake Energy was one of the largest natural gas producers in the U.S., particularly recognized for pioneering efforts in leveraging hydraulic fracturing (fracking) technology to extract natural gas from shale formations.

However, the company faced financial challenges and underwent various restructuring efforts over the years. Here’s a look at key metrics that Wall Street analysts will be closely watching, what they expect from the earnings report, and how the stock is placed currently, relative to consensus expectations.

Chesapeake Energy Q3 Earnings – Key Items To Watch

Given increased demand for U.S.-based natural gas in 2024, Chesapeake’s prospects with natural gas are currently on every analysts’ radar. The company’s LNG exports could potentially deliver high margins from its Haynesville assets, aiding Chesapeakes’ current efforts towards achieving a positive EPS by 2024 and revenue growth by 2025.

However, weak balance sheet management remains a key concern for this stock, making Chesapeake a risky play on U.S. natural gas prospects.

CHK Stock: Analyst Ratings & Consensus Estimates

For the third-quarter, Wall Street analysts are expecting Chesapeake to report 64 cents in EPS and $1.2 billion in revenue. For the fiscal year ending December 2023, the company is expected to report $4.04 in EPS and $4.02 billion in revenue.

Recent analyst reports from 20 analysts over the last 90 days rate the stock a Buy with an average consensus price target of $106.42.

Over the past month, we’ve seen many sell-side analysts raising their price target for Chesapeake stock. Roger Read of Wells Fargo with an Equal-Weight rating raised his price target from $85 to $89 while Josh Silverstein of UBS (with a Buy rating) raised from $102 to a price target of $106.

Read Also: Analyst Ratings for Chesapeake Energy

CHK Stock Price Action

The stock has largely been range bound between $80 and $90 over the past month and was trading flat at $85.68 at the time of publication Tuesday.

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