AnalystConsensusTarget updated the narrative for OGS

Analysts have raised the fair value estimate for ONE Gas from $76.67 to $80.07 per share. They cite regulatory catalysts, supportive legislation, and the company’s attractive relative valuation as key drivers for the updated price target.

Analyst Commentary

Recent Street research reveals a mix of optimism and caution among analysts assessing ONE Gas. Regulatory changes, legislative developments, and valuation metrics remain central to their views on the company’s growth prospects and risks.

Bullish Takeaways

• Bullish analysts point to the company’s exposure to supportive legislation in Texas, notably HB 4384. This is seen as a tailwind for future regulatory approval and earnings visibility.
• ONE Gas continues to trade at a modest discount to its peer group. Some analysts view this as an attractive entry point given its status as a fully regulated utility with a strong balance sheet.
• Upcoming regulatory catalysts and favorable interest rate movements are expected to support ongoing growth and maintain capital flows to the shares.
• The sector’s recent outperformance relative to market benchmarks has bolstered confidence in regulated utility stocks. Analysts are also paying additional attention to data center pipeline evolution and renewable initiatives.

Bearish Takeaways

• Bearish analysts have adjusted price targets downward in response to sector-wide reviews. They note that near-term valuation may already reflect much of the expected regulatory upside.
• There is growing scrutiny around interconnection times for utility-adjacent infrastructure. This could introduce delays or execution risks in major growth projects.
• While long-term prospects appear solid, some caution remains about the pace and scale of earnings growth relative to peers, especially in light of mixed signals on renewables and residential solar initiatives.

What's in the News

• Approved and adopted amended and restated By-laws effective August 4, 2025, including updates to make language gender neutral (Key Developments)
• Raised 2025 earnings guidance to a new net income range of $261 million to $267 million. Expected earnings per diluted share will increase to approximately $4.32 to $4.42 (Key Developments)

Valuation Changes

• Fair Value Estimate has risen from $76.67 to $80.07 per share. This reflects a modest upward revision.
• Discount Rate remains unchanged at 6.78 percent. This indicates stable risk assessment in valuation models.
• Revenue Growth expectations have fallen significantly, decreasing from 3.53 percent to 2.10 percent.
• Net Profit Margin has increased from 12.48 percent to 13.29 percent. This suggests an improved profitability outlook.
• Future P/E Ratio has edged up from 20.53x to 21.01x, indicating a slight rise in anticipated valuation multiples.