The annual results for ONE Gas, Inc. (NYSE:OGS) were released last week, making it a good time to revisit its performance. Results were roughly in line with estimates, with revenues of US$1.7b and statutory earnings per share of US$3.51. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on ONE Gas after the latest results.
Taking into account the latest results, ONE Gas's seven analysts currently expect revenues in 2020 to be US$1.65b, approximately in line with the last 12 months. Statutory earnings per share are expected to rise 2.6% to US$3.62. Before this earnings report, analysts had been forecasting revenues of US$1.65b and earnings per share (EPS) of US$3.62 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Analysts reconfirmed their price target of US$93.11, showing that the business is executing well and in line with expectations. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on ONE Gas, with the most bullish analyst valuing it at US$100.00 and the most bearish at US$83.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 0.4% revenue decline a notable change from historical growth of 0.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 4.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect ONE Gas to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that ONE Gas's revenues are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for ONE Gas going out to 2024, and you can see them free on our platform here..
You can also view our analysis of ONE Gas's balance sheet, and whether we think ONE Gas is carrying too much debt, for free on our platform here.
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