In This Article:
As you might know, ONEOK, Inc. (NYSE:OKE) last week released its latest quarterly, and things did not turn out so great for shareholders. It looks like a weak result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of US$4.8b missed by 16%, and statutory earnings per share of US$1.09 fell short of forecasts by 5.7%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 ONEOK
After the latest results, the nine analysts covering ONEOK are now predicting revenues of US$23.4b in 2024. If met, this would reflect a major 30% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 29% to US$4.98. Before this earnings report, the analysts had been forecasting revenues of US$24.1b and earnings per share (EPS) of US$4.93 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The consensus has reconfirmed its price target of US$83.49, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on ONEOK's market value. 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 ONEOK at US$93.00 per share, while the most bearish prices it at US$70.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting ONEOK is an easy business to forecast or the the analysts are all using similar assumptions.
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. It's clear from the latest estimates that ONEOK's rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 17% 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 2.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that ONEOK is expected to grow much faster than its industry.