The quarterly results for National Fuel Gas Company (NYSE:NFG) were released last week, making it a good time to revisit its performance. It looks to have been a bit of a mixed result. While revenues of US$444m fell 17% short of what analysts had predicted, statutory earnings per share (EPS) of US$1.00 exceeded expectations by 5.3%. 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 National Fuel Gas after the latest results.
Taking into account the latest results, National Fuel Gas's dual analysts currently expect revenues in 2020 to be US$1.62b, approximately in line with the last 12 months. Statutory earnings per share are forecast to fall 11% to US$2.98 in the same period. Before this earnings report, analysts had been forecasting revenues of US$1.91b and earnings per share (EPS) of US$3.32 in 2020. Indeed, we can see that analysts are a lot more bearish about National Fuel Gas's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
Despite the cuts to forecast earnings, there was no real change to the US$45.80 price target, showing that analysts don't think the changes have a meaningful impact on the stock's intrinsic value.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the National Fuel Gas's past performance and to peers in the same market. One more thing stood out to us about these estimates, and it's that National Fuel Gas's decline is expected to slow down, with revenues forecast to fall 1.7% next year, improving on a historical decline of 1.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the market are forecast to see their revenue decline 4.8% per year. So it's pretty clear that, while it does have declining revenues, at least analysts expect National Fuel Gas to suffer less severely than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for National Fuel Gas. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will 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.
With that in mind, we wouldn't be too quick to come to a conclusion on National Fuel Gas. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.
You can also view our analysis of National Fuel Gas's balance sheet, and whether we think National Fuel Gas is carrying too much debt, for free on our platform here.
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