Black Stone Minerals Q3 Earnings: Can NYSE:BSM Hit Its $0.18 EPS Target?

in EARNINGS/INVESTING IDEAS by

Black Stone Minerals, L.P. (NYSE:BSM) is scheduled to report Q3 earnings results on November 2, 2020.

The company is expected to report earnings of $0.18/share on revenue of $88.025 million. The consensus earnings per share (EPS) of $0.18/share is based on a poll of 4 analysts and represents a decline in eps of −31.2% over the same quarter last year, when the company reported earnings of $0.27/share.

The revenue forecast of $88.025 million based on a poll of 4 analysts implies a year-over-year (YoY) decline in revenue of −35.9%. Last year the company reported $137.4 million in revenue for the quarter.

Expected to report EPS contraction of −31.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $88.03 $137.37 −35.9%
EPS $0.18 $0.27 −31.2%

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 Black Stone Minerals, L.P. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.18 $0.20 12.3% Beat
Q1, 2020 $0.19 $0.20 3.6% Beat
Q4, 2019 $0.27 $0.30 13.0% Beat
Q3, 2019 $0.29 $0.27 −10.1% Missed
Q2, 2019 $0.27 $0.29 8.9% Beat
Q1, 2019 $0.26 $0.23 −12.5% Missed
Q4, 2018 $0.30 $0.26 −14.8% Missed
Q3, 2018 $0.28 $0.27 −2.4% Missed

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 3.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 3, 2020 $7.01 $7.25 3.4% Increase
May 4, 2020 $5.73 $6.13 7.0% Increase
February 24, 2020 $10.12 $8.93 −11.8% Decline
November 4, 2019 $13.08 $13.13 0.4% Increase

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 −3.92, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.92 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Black Stone Minerals, L.P. is currently trading at $6.25/share, up 0.3% for the day. The company is trading at approximately 45.6% of its 52-week high of $13.72/share. The company’s stock price is down −13.8% since the last earnings report and up 0.8% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 50.42 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:BSM Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 8.23 and a forward P/E multiple of 8.36.

Black Stone Minerals, L.P.’s current share price also implies a price-to-book (P/B) multiple of 1.67. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $6.25
P/E Ratio 8.2x
P/E Ratio (Fwd) 8.4x
PEG Ratio −0.2
Total Debt / Total Capital 17.0%
Levered Free Cash Flow $347.3 million
EV / EBITDA 5.5x

Finbox

Black Stone Minerals, L.P. is a small-cap stock with a market capitalization of $1.292 billion and a total enterprise value of $1.914 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.

Black Stone Minerals, L.P. owns and manages oil and natural gas mineral interests in the United States. The company owns mineral interests in approximately 16.8 million acres, nonparticipating royalty interests in 1.8 million acres, and overriding royalty interests in 1.7 million acres located in 41 states in the United States. As of December 31, 2019, the company had a total estimated proved oil and natural gas reserves of 68,543 barrels of oil equivalent. Black Stone Minerals, L.P. was founded in 1876 and is based in Houston, Texas.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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