Industry Analysts Just Upgraded Their OGE Energy Corp. (NYSE:OGE) Revenue Forecasts By 17%

OGE Energy Corp. (NYSE:OGE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that OGE Energy will make substantially more sales than they'd previously expected.

Following the latest upgrade, the eight analysts covering OGE Energy provided consensus estimates of US$3.3b revenue in 2022, which would reflect an uneasy 8.5% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$2.9b of revenue in 2022. It looks like there's been a clear increase in optimism around OGE Energy, given the solid increase in revenue forecasts.

See our latest analysis for OGE Energy

We'd point out that there was no major changes to their price target of US$41.82, suggesting the latest estimates were not enough to shift their view on the value of the business. 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. The most optimistic OGE Energy analyst has a price target of US$45.00 per share, while the most pessimistic values it at US$36.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting OGE Energy is an easy business to forecast or the underlying assumptions are obvious.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 8.5% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 8.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.0% annually for the foreseeable future. It's pretty clear that OGE Energy's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at OGE Energy.

Analysts are clearly in love with OGE Energy at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.