- Oops!Something went wrong.Please try again later.
DT Midstream, Inc. (NYSE:DTM) just released its latest first-quarter report and things are not looking great. Results look to have been somewhat negative - revenue fell 4.2% short of analyst estimates at US$215m, and statutory earnings of US$0.84 per share missed forecasts by 6.2%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the five analysts covering DT Midstream are now predicting revenues of US$909.2m in 2022. If met, this would reflect a satisfactory 6.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to expand 17% to US$3.74. Before this earnings report, the analysts had been forecasting revenues of US$909.2m and earnings per share (EPS) of US$3.50 in 2022. So the consensus seems to have become somewhat more optimistic on DT Midstream's earnings potential following these results.
There's been no major changes to the consensus price target of US$58.44, 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. The most optimistic DT Midstream analyst has a price target of US$61.00 per share, while the most pessimistic values it at US$55.00. This is a very narrow spread of estimates, implying either that DT Midstream is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 8.0% growth on an annualised basis. That is in line with its 9.7% annual growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 2.8% annually. So it's clear that not only is revenue growth expected to be maintained, but DT Midstream is expected to grow meaningfully faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards DT Midstream following these results. On the plus side, they made no changes to their revenue estimates - and they expect sales to perform better than the wider 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.
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 DT Midstream analysts - going out to 2024, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for DT Midstream that you need to be mindful of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.