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Q3 Earnings Preview for Northwest Natural (NYSE:NWN)

in EARNINGS/INVESTING IDEAS by

Northwest Natural Holding Company (NYSE:NWN) is scheduled to report Q3 earnings results on November 5, 2020.

The company is expected to report earnings of -$0.68/share on revenue of $97.324 million. The consensus earnings per share (EPS) of -$0.68/share is based on a poll of 7 analysts and represents a decline in eps of -11.7% over the same quarter last year, when the company reported earnings of -$0.61/share.

The revenue forecast of $97.324 million based on a poll of 3 analysts implies a year-over-year (YoY) growth in revenue of 7.8%. Last year the company reported $90.317 million in revenue for the quarter.

Expected to report EPS of -$0.68/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $97.32 $90.32 7.8%
EPS -$0.68 -$0.61 -11.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from Northwest Natural Holding Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.03 -$0.17 -555.9% Missed
Q1, 2020 $1.57 $1.58 0.4% Beat
Q4, 2019 $1.22 $1.26 2.9% Beat
Q3, 2019 -$0.53 -$0.61 -16.1% Missed
Q2, 2019 -$0.07 $0.07 202.9% Beat
Q1, 2019 $1.37 $1.73 26.0% Beat
Q4, 2018 $1.19 $1.27 6.4% Beat
Q3, 2018 -$0.40 -$0.39 2.5% 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 2.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 7, 2020 $53.66 $54.96 2.4% Increase
May 8, 2020 $63.19 $65.16 3.1% Increase
March 2, 2020 $65.77 $65.02 −1.1% Decline
November 5, 2019 $66.92 $65.52 −2.1% 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 −3.27, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.27 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Northwest Natural Holding Company is currently trading at $44.44/share, down −0.6% for the day. The company is trading at approximately 57.5% of its 52-week high of $77.26/share. The company’s stock price is down −19.1% since the last earnings report and down −5.5% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 41.92 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:NWN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 21.55 and a forward P/E multiple of 19.80.

Northwest Natural Holding Company’s current share price also implies a price-to-book (P/B) multiple of 1.54. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $44.44
P/E Ratio 21.6x
P/E Ratio (Fwd) 19.8x
PEG Ratio −1.3
Total Debt / Total Capital 48.1%
Levered Free Cash Flow -$87.405 million
EV / EBITDA 10.8x

Finbox

Northwest Natural Holding Company is a small-cap stock with a market capitalization of $1.358 billion and a total enterprise value of $2.489 billion. The company operates in the Utilities sector and the Gas Utilities industry.

Northwest Natural Holding Company, through its subsidiary, Northwest Natural Gas Company, provides regulated natural gas distribution services to residential, commercial, industrial, and transportation customers in Oregon and Southwest Washington. It is also involved in gas storage activities, water businesses, and other investments activities. It serves approximately 2.5 million customers in approximately 140 communities through 760,000 meters. The company was founded in 1859 and is headquartered in Portland, Oregon.

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