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A week ago, Magnolia Oil & Gas Corporation (NYSE:MGY) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of US$319m arriving 4.1% ahead of forecasts. Statutory earnings per share (EPS) were US$0.46, 3.3% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Magnolia Oil & Gas
Taking into account the latest results, the consensus forecast from Magnolia Oil & Gas' 13 analysts is for revenues of US$1.37b in 2024. This reflects a solid 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 9.6% to US$2.26. In the lead-up to this report, the analysts had been modelling revenues of US$1.33b and earnings per share (EPS) of US$2.09 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades,the analysts have not made any major changes to their price target of US$27.97, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. 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. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Magnolia Oil & Gas' rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 11% p.a. 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 2.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Magnolia Oil & Gas is expected to grow much faster than its industry.