On Tuesday, Ladenburg Thalmann elevated the status of ONE Gas Inc. (NYSE: NYSE:OGS) from Neutral to Buy, setting a price target of $64.50 for the shares. The upgrade was attributed to a reassessment of the company's valuation. Initially, when the firm began covering the stock on February 14, they had subtracted $6.50 from their price target due to short-term debt considerations. However, they recognized an oversight in not accounting for the after-tax interest drag in their utility price target.
The correction of this oversight has resulted in an increase of $3.40 to the price target. Ladenburg Thalmann's analysts maintain a positive outlook on ONE Gas's potential to enhance its earned returns through frequent rate filings. This strategy is expected to support the company in achieving its projected earnings per share (EPS) growth of 4%-6%.
The firm's 2026 EPS estimate is based on a 4.9% growth rate, starting from the midpoint of ONE Gas's original guidance for 2023. This estimate aligns closely with the midpoint of the company's targeted growth range. The upgrade reflects confidence in ONE Gas's ability to meet its financial objectives and suggests a favorable investment opportunity based on the current stock valuation.
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