Growth Investors: Industry Analysts Just Upgraded Their Southwest Gas Holdings, Inc. (NYSE:SWX) Revenue Forecasts By 30%
Shareholders in Southwest Gas Holdings, Inc. (NYSE:SWX) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
Following this upgrade, Southwest Gas Holdings' twin analysts are forecasting 2024 revenues to be US$5.5b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 60% to US$3.37. Before this latest update, the analysts had been forecasting revenues of US$4.3b and earnings per share (EPS) of US$3.20 in 2024. The most recent forecasts are noticeably more optimistic, with a sizeable gain to revenue estimates and a lift to earnings per share as well.
Check out our latest analysis for Southwest Gas Holdings
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$72.28, suggesting that the forecast performance does not have a long term impact on the company's valuation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Southwest Gas Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.9% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that Southwest Gas Holdings is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Southwest Gas Holdings.
Analysts are definitely bullish on Southwest Gas Holdings, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including the risk of cutting its dividend. You can learn more, and discover the 1 other risk we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
