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Chesapeake Energy (CHK) Gains But Lags Market: What You Should Know

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Chesapeake Energy (CHK - Free Report) closed at $2.75 in the latest trading session, marking a +0.73% move from the prior day. This change lagged the S&P 500's 1.47% gain on the day. Meanwhile, the Dow gained 0.79%, and the Nasdaq, a tech-heavy index, added 2.02%.

Coming into today, shares of the natural gas company had gained 10.53% in the past month. In that same time, the Oils-Energy sector gained 0.93%, while the S&P 500 gained 1.5%.

Investors will be hoping for strength from CHK as it approaches its next earnings release. On that day, CHK is projected to report earnings of $0.16 per share, which would represent a year-over-year decline of 52.94%. Meanwhile, our latest consensus estimate is calling for revenue of $1.03 billion, down 17.51% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for CHK. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 11.86% lower within the past month. CHK is currently a Zacks Rank #4 (Sell).

Valuation is also important, so investors should note that CHK has a Forward P/E ratio of 4.96 right now. For comparison, its industry has an average Forward P/E of 13.36, which means CHK is trading at a discount to the group.

It is also worth noting that CHK currently has a PEG ratio of 0.75. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Oil and Gas - Exploration and Production - United States was holding an average PEG ratio of 1.09 at yesterday's closing price.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 188, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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