Yahoo Finance AltaGas Ltd. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Last week saw the newest first-quarter earnings release from AltaGas Ltd. (TSE:ALA), an important milestone in the company's journey to build a stronger business. The results were mixed; although revenues of CA$3.7b fell 11% short of what the analysts had predicted, per-share (statutory) earnings of CA$1.37 beat expectations by 34%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on AltaGas after the latest results.
See our latest analysis for AltaGas
Taking into account the latest results, the consensus forecast from AltaGas' four analysts is for revenues of CA$13.3b in 2024. This reflects a modest 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 13% to CA$2.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$13.3b and earnings per share (EPS) of CA$2.15 in 2024. So the consensus seems to have become somewhat more optimistic on AltaGas' earnings potential following these results.
There's been no major changes to the consensus price target of CA$34.17, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values AltaGas at CA$36.00 per share, while the most bearish prices it at CA$33.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that AltaGas' revenue growth is expected to slow, with the forecast 7.7% annualised growth rate until the end of 2024 being well below the historical 23% p.a. growth over the last five years. Compare this to the 18 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.8% per year. Factoring in the forecast slowdown in growth, it looks like AltaGas is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around AltaGas' earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple AltaGas analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 5 warning signs for AltaGas (of which 1 shouldn't be ignored!) you should know about.
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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.
