ONE Gas saw its analyst price target raised from $82.50 to $85.36. Analysts cited an improved earnings outlook, positive effects from Texas legislation, and a more balanced valuation in their updated assessments.
Analyst Commentary
Recent Street research presents a mixed outlook for ONE Gas, highlighting both supportive factors and ongoing challenges as seen in the latest analyst actions and commentary.
Bullish Takeaways- Analysts have raised price targets in response to an improved earnings outlook and benefits from recently enacted Texas legislation, which is viewed as supportive for regulated utilities.
- ONE Gas is believed to have a strong balance sheet, and its shares are considered attractively valued compared to industry peers, even though it operates as a fully regulated utility.
- Interest rate tailwinds are noted as a positive factor for future growth and margin expansion.
- Regulatory catalysts ahead, combined with a more balanced valuation, are expected to drive continued upside potential for the stock.
- While there have been target price increases, some analysts have maintained neutral outlooks, citing that utilities as a sector have underperformed broader market returns in recent periods.
- There are continuing concerns around the pace of sector growth, specifically regarding developments in data center pipelines and interconnection timelines that may impact future utility demand.
- Cautious analysts remain attentive to valuation risks, emphasizing that while the outlook has improved, execution and regulatory outcomes will be key to sustaining performance.
What's in the News
- ONE Gas Board of Directors adopted amended and restated By-laws, allowing special meetings of the Board or its committees to be called by the chair, lead independent director, governance chair, or a quorum of directors. This change is effective November 19, 2025 (Key Developments).
- The company updated its 2025 earnings guidance, narrowing the net income range to $262 million to $266 million and earnings per diluted share to approximately $4.34 to $4.40. The midpoints remain unchanged and are 2.5% higher than original forecasts (Key Developments).
Valuation Changes
- Consensus Analyst Price Target increased modestly from $82.50 to $85.36. This reflects a more favorable market outlook.
- Discount Rate rose slightly, moving from 6.78% to 6.96%. This indicates a marginal adjustment in perceived risk or required return.
- Revenue Growth expectations climbed from 1.6% to 3.4%. This suggests a more optimistic outlook for top-line expansion.
- Net Profit Margin edged down from 13.65% to 12.92%. This signals anticipated pressure on operational profitability.
- Future P/E ratio declined from 21.05x to 18.53x. This points to a more attractive valuation based on updated forecasted earnings.
Disclaimer
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