Caesars Entertainment misses Q2 earnings expectations, shares edge lower
On Tuesday, Citi analysts adjusted their outlook on Core Laboratories (NYSE:CLB), reducing the price target from $16.00 to $13.00 while retaining a Neutral rating on the stock. The revision comes as CLB’s shares have declined 40% over the past six months, currently trading at $12.06. According to InvestingPro data, two analysts have recently revised their earnings estimates downward. The revision follows an update to their Core Laboratories model, which includes a decrease in the second quarter operating income forecast to $13.5 million from the previous $14 million estimate.
The adjustment is attributed to anticipated lower revenues in both of Core Laboratories’ segments. With current gross profit margins at 19.77% and annual revenue of $517.8 million, the company faces profitability challenges. Furthermore, Citi analysts have revised the full year 2025 operating income projection downward to $53 million from $64 million, which aligns with the consensus estimates. This change is based on expectations of reduced revenue and margin performance.
Specifically, the analysts foresee Reservoir Description (RD) revenues decreasing by approximately 2% year-over-year with operating income margins around 13%, and Production Enhancement (PE) revenues declining by 9% year-over-year at 5.5% operating income margins. Looking ahead, the forecast for fiscal year 2026 operating income has been set at $52 million, which falls below the consensus estimates of $63 million.
The new price target of $13.00 is derived using a combination of an 8% free cash flow yield and a discounted cash flow (DCF) analysis, which also resulted in a $13.00 valuation. This revised price target reflects Citi analysts’ updated expectations for Core Laboratories’ financial performance in the coming years.
In other recent news, Core Laboratories reported disappointing financial results for the first quarter of 2025, with earnings per share (EPS) at $0.14, significantly below the projected $0.29. Revenue also fell short of expectations, totaling $123.6 million against the anticipated $143.5 million. Despite these results, Core Laboratories has projected a potential rebound for the second quarter, with expected revenue ranging from $128 million to $134 million and EPS between $0.17 and $0.21. Additionally, the company has taken strategic steps by opening a new Unconventional Core Analysis Laboratory in Dammam, Saudi Arabia, in collaboration with Abdulla Fouad Group, to enhance its capabilities in the Middle East. Meanwhile, Core Laboratories has introduced new products and implemented cost reductions, which may have contributed to some optimism among investors. The company remains focused on expanding its global footprint and addressing the complexities of unconventional resource development. Analyst feedback from firms like Stifel and Daniel Energy Partners suggests cautious optimism about Core Laboratories’ future, with a focus on international growth opportunities.
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