Chart Industries (NYSE: GTLS) reported stronger-than-expected Q1 results, topping both earnings and revenue estimates. All-time-high orders, resulting from robust energy activity since the beginning of the Ukraine-Russia conflict, drove the results.
Further, investors cheered the raised FY-2022 earnings guidance, which was well above analysts’ expectations.
Likewise, shares of the company gained 8.7% to close at $168.82 on April 29. Chart Industries is a leading global manufacturer of highly engineered equipment, servicing multiple applications in the clean energy and industrial gas markets.
Q1 Beat
Notably, adjusted earnings of $0.65 per share beat analysts’ expectations of $0.57 per share. However, adjusted earnings were lower than the $0.73 per share reported in the prior-year period.
In addition, sales jumped 22.7% year-over-year to $354.1 million but missed consensus estimates of $360.2 million.
The increase reflected a surge in orders to an all-time high of $636.8 million, driven by $228.4 million of Big LNG export terminal releases.
Raised FY-2022 Outlook
Based on robust Q1 results, management raised its financial guidance for 2022.
The company now forecasts adjusted earnings in the range of $5.35-$5.60 per share, while the consensus estimate was $5.14 per share. Revenues are forecast to be in the range of $1.725 – $1.85 billion, versus the consensus estimate of $1.76 billion.
Management’s Commentary
During the earnings call, management stated that it continues to expect “additional progress from other LNG export terminal operators to FID with the potential for additional Big LNG as well as ssLNG orders with Chart releases in 2022”.
Wall Street’s Take
Following the upbeat Q1 results, Wells Fargo analyst Roger Read increased the price target on Chart Industries to $205 (22.8% upside potential) from $200 and reiterated a Buy rating.
Overall, the stock has a Strong Buy consensus rating based on 10 Buys and one Hold rating assigned in the past three months. The average Chart Industries price target of $190.45 implies 14% upside potential from current levels.
Bloggers Weigh In
TipRanks data shows that financial blogger opinions are 100% Bullish on GTLS stock, compared to a sector average of 69%.
Key Takeaway
Chart Industries benefited from the sudden upsurge in demand for its products, triggered by Russia’s attack on Ukraine and the resulting supply shortages in the oil markets.
Backlog and order books remain at an all-time high. Notably, the Big LNG orders book remains very strong, further boosting the company’s long-term profitability outlook.
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