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DTE Energy Q3 Earnings: Can NYSE:DTE Hit Its $2.03 EPS Target?

in EARNINGS/INVESTING IDEAS by

DTE Energy Company (NYSE:DTE) is scheduled to report Q3 earnings results before markets open for trading on October 27, 2020.

The company is expected to report earnings of $2.03/share on revenue of $3.208 billion. The consensus earnings per share (EPS) of $2.03/share is based on a poll of 16 analysts and represents a growth in eps of 6.2% over the same quarter last year, when the company reported earnings of $1.91/share.

The revenue forecast of $3.208 billion based on a poll of 3 analysts implies a year-over-year (YoY) growth in revenue of 2.9%. Last year the company reported $3.119 billion in revenue for the quarter.

Expected to report EPS growth of 6.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $3,208.15 $3,119.00 2.9%
EPS $2.03 $1.91 6.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.

What are your expectations from DTE Energy Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.28 $1.53 19.5% Beat
Q1, 2020 $1.77 $1.66 −6.3% Missed
Q4, 2019 $1.30 $1.35 4.2% Beat
Q3, 2019 $1.97 $1.91 −3.2% Missed
Q2, 2019 $1.09 $0.99 −9.5% Missed
Q1, 2019 $1.96 $2.05 4.8% Beat
Q4, 2018 $0.93 $0.91 −2.6% Missed
Q3, 2018 $1.75 $2.13 21.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 1.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $114.01 $115.22 1.1% Increase
April 28, 2020 $102.68 $107.29 4.5% Increase
February 5, 2020 $133.10 $134.21 0.8% Increase
October 28, 2019 $128.21 $126.59 −1.3% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.84, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.84 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

DTE Energy Company is currently trading at $121.34/share, up 2.7% for the day. The company is trading at approximately 89.4% of its 52-week high of $135.67/share. The company’s stock price is up 5.3% since the last earnings report and up 1.6% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 57.94 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:DTE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 19.46 and a forward P/E multiple of 17.65.

DTE Energy Company’s current share price also implies a price-to-book (P/B) multiple of 1.99. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $121.34
P/E Ratio 19.5x
P/E Ratio (Fwd) 17.7x
PEG Ratio 4.2
Total Debt / Total Capital 45.4%
Levered Free Cash Flow -$661 million
EV / EBITDA 14.1x

Finbox

DTE Energy Company is a large-cap stock with a market capitalization of $23.376 billion and a total enterprise value of $42.043 billion. The company operates in the Utilities sector and the Multi-Utilities industry.

DTE Energy Company engages in the utility operations. The company’s Electric segment generates, purchases, distributes, and sells electricity to approximately 2.2 million residential, commercial, and industrial customers in southeastern Michigan. It generates electricity through fossil-fuel, hydroelectric pumped storage, and nuclear plants, as well as wind and other renewable assets. This segment owns and operates approximately 700 distribution substations and 445,200 line transformers. The company’s Gas segment purchases, stores, transports, distributes, and sells natural gas to approximately 1.3 million residential, commercial, and industrial customers throughout Michigan; and sells storage and transportation capacity. This segment has approximately 20,000 miles of distribution mains; 1,305,000 service pipelines; and 1,285,000 active meters, as well as owns approximately 2,000 miles of transmission pipelines. Its Gas Storage and Pipelines segment owns natural gas storage fields, lateral and gathering pipeline systems, and compression and surface facilities, as well as has ownership interests in interstate pipelines serving the Gulf Coast, Midwest, Ontario, and northeast markets. The company’s Power and Industrial Projects segment offers metallurgical coke; pulverized coal and petroleum coke to the steel, pulp and paper, and other industries; and power, steam and chilled water production, and wastewater treatment services, as well as supplies compressed air to industrial customers. It also owns and operates 5 renewable generating plants with a capacity of 217 MWs; 23 gas recovery sites; and 10 reduced emissions fuel facilities. Its Energy Trading segment engages in power, natural gas, and environmental marketing and trading; structured transactions; and the optimization of contracted natural gas pipeline transportation and storage positions. The company was founded in 1903 and is headquartered in Detroit, Michigan.

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