Revenue Miss: ONEOK, Inc. Fell 9.5% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models
It's been a good week for ONEOK, Inc. (NYSE:OKE) shareholders, because the company has just released its latest full-year results, and the shares gained 3.0% to US$75.13. Revenues came in 9.5% below expectations, at US$18b. Statutory earnings per share were relatively better off, with a per-share profit of US$5.48 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for ONEOK
Following the latest results, ONEOK's ten analysts are now forecasting revenues of US$24.3b in 2024. This would be a substantial 37% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 7.7% to US$4.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$24.3b and earnings per share (EPS) of US$5.15 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$77.73, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values ONEOK at US$87.00 per share, while the most bearish prices it at US$62.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting ONEOK's growth to accelerate, with the forecast 37% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ONEOK to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ONEOK. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for ONEOK going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for ONEOK you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
