Magnolia Oil & Gas Corporation (NYSE:MGY) Just Released Its Annual Earnings: Here's What Analysts Think

It's been a good week for Magnolia Oil & Gas Corporation (NYSE:MGY) shareholders, because the company has just released its latest annual results, and the shares gained 6.1% to US$24.60. It looks like the results were a bit of a negative overall. While revenues of US$1.3b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.3% to hit US$1.94 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Magnolia Oil & Gas

After the latest results, the ten analysts covering Magnolia Oil & Gas are now predicting revenues of US$1.37b in 2025. If met, this would reflect a credible 4.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 8.7% to US$2.08. Before this earnings report, the analysts had been forecasting revenues of US$1.34b and earnings per share (EPS) of US$2.03 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Despite these upgrades,the analysts have not made any major changes to their price target of US$28.47, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Magnolia Oil & Gas at US$35.00 per share, while the most bearish prices it at US$22.00. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Magnolia Oil & Gas' revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.5% annually. So it's pretty clear that, while Magnolia Oil & Gas' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Magnolia Oil & Gas following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Magnolia Oil & Gas going out to 2027, and you can see them free on our platform here..

You can also see whether Magnolia Oil & Gas is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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.