National Fuel Gas Company Just Beat EPS By 28%: Here's What Analysts Think Will Happen Next

The quarterly results for National Fuel Gas Company (NYSE:NFG) were released last week, making it a good time to revisit its performance. Revenues missed the mark, coming in 18% below forecasts, at US$630m. Statutory profits were a real bright spot in contrast, with per-share profits of US$1.80 being a notable 28% above what the analysts were modelling. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for National Fuel Gas

After the latest results, the three analysts covering National Fuel Gas are now predicting revenues of US$2.24b in 2024. If met, this would reflect a meaningful 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 8.5% to US$4.63 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.38b and earnings per share (EPS) of US$4.53 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The consensus has made no major changes to the price target of US$63.67, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on National Fuel Gas, with the most bullish analyst valuing it at US$72.00 and the most bearish at US$56.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting National Fuel Gas is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting National Fuel Gas' growth to accelerate, with the forecast 32% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.6% 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 8.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that National Fuel Gas is expected to grow much faster than its 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 National Fuel Gas following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at US$63.67, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for National Fuel Gas going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for National Fuel Gas that you need to be mindful of.

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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.