AltaGas Ltd. (TSE:ALA) Analysts Just Slashed This Year's Revenue Estimates By 11%

One thing we could say about the analysts on AltaGas Ltd. (TSE:ALA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. At CA$26.03, shares are up 4.9% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the latest downgrade, the current consensus, from the eight analysts covering AltaGas, is for revenues of CA$12b in 2023, which would reflect a considerable 10% reduction in AltaGas' sales over the past 12 months. Before the latest update, the analysts were foreseeing CA$14b of revenue in 2023. The consensus view seems to have become more pessimistic on AltaGas, noting the measurable cut to revenue estimates in this update.

Check out our latest analysis for AltaGas

We'd point out that there was no major changes to their price target of CA$31.31, suggesting the latest estimates were not enough to shift their view on the value of the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values AltaGas at CA$36.00 per share, while the most bearish prices it at CA$26.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await AltaGas shareholders.

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. We would highlight that sales are expected to reverse, with a forecast 20% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 29% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - AltaGas is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for AltaGas this year. They also expect company revenue to perform worse than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on AltaGas after today.

But wait - there's more! We have estimates for AltaGas from its eight analysts out until 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.

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