Yahoo Finance ONEOK, Inc. Just Missed Revenue By 16%: Here's What Analysts Think Will Happen Next
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.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. 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. We have estimates - from multiple ONEOK analysts - going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 4 warning signs for ONEOK (1 makes us a bit uncomfortable!) that we have uncovered.
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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.
