Revenue Miss: OGE Energy Corp. Fell 21% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models
The yearly results for OGE Energy Corp. (NYSE:OGE) were released last week, making it a good time to revisit its performance. OGE Energy reported a serious miss, with revenue of US$2.7b falling a huge 21% short of analyst estimates. The bright side is that statutory earnings per share of US$2.07 were in line with forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for OGE Energy
Taking into account the latest results, the most recent consensus for OGE Energy from five analysts is for revenues of US$3.00b in 2024. If met, it would imply a notable 12% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 2.0% to US$2.12. Before this earnings report, the analysts had been forecasting revenues of US$3.51b and earnings per share (EPS) of US$2.14 in 2024. Indeed we can see that the consensus opinion has undergone some fundamental changes following the latest results, with a real cut to revenues and some minor tweaks to earnings numbers.
It will come as no surprise then, that the consensus price target fell 5.4% to US$33.17following these changes. 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. Currently, the most bullish analyst values OGE Energy at US$37.00 per share, while the most bearish prices it at US$21.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await OGE Energy shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the OGE Energy's past performance and to peers in the same industry. It's clear from the latest estimates that OGE Energy's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that OGE Energy is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded OGE Energy's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of OGE Energy's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for OGE Energy going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with OGE Energy (including 1 which is potentially serious) .
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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.
