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The analysts might have been a bit too bullish on OGE Energy Corp. (NYSE:OGE), given that the company fell short of expectations when it released its quarterly results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$702m, statutory earnings missed forecasts by 18%, coming in at just US$0.89 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the seven analysts covering OGE Energy are now predicting revenues of US$2.39b in 2021. If met, this would reflect a notable 13% improvement in sales compared to the last 12 months. Earnings are expected to improve, with OGE Energy forecast to report a statutory profit of US$2.22 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.39b and earnings per share (EPS) of US$2.21 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$35.40. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on OGE Energy, with the most bullish analyst valuing it at US$37.00 and the most bearish at US$33.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting OGE Energy is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that OGE Energy is forecast to grow faster in the future than it has in the past, with revenues expected to grow 13%. If achieved, this would be a much better result than the 0.3% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 3.7% next year. So it looks like OGE Energy is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for OGE Energy going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - OGE Energy has 3 warning signs (and 1 which can't be ignored) we think you should know about.
This article by Simply Wall St is general in nature. 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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