Industry Analysts Just Upgraded Their ONE Gas, Inc. (NYSE:OGS) Revenue Forecasts By 14%
ONE Gas, Inc. (NYSE:OGS) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
Following this upgrade, ONE Gas' five analysts are forecasting 2023 revenues to be US$2.7b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 5.6% to US$4.15. Previously, the analysts had been modelling revenues of US$2.3b and earnings per share (EPS) of US$4.14 in 2023. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.
View our latest analysis for ONE Gas
It may not be a surprise to see that the analysts have reconfirmed their price target of US$79.33, implying that the uplift in sales is not expected to greatly contribute to ONE Gas's valuation in the near term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on ONE Gas, with the most bullish analyst valuing it at US$84.00 and the most bearish at US$70.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting ONE Gas is an easy business to forecast or the underlying assumptions are obvious.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ONE Gas' past performance and to peers in the same industry. It's pretty clear that there is an expectation that ONE Gas' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 1.3% growth on an annualised basis. This is compared to a historical growth rate of 9.5% 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 1.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ONE Gas.
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. 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 ONE Gas.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple ONE Gas analysts - going out to 2025, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.
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