Oil and Natural Gas Corporation Limited (NSE:ONGC) just released its quarterly report and things are looking bullish. Statutory earnings performance was extremely strong, with revenue of ₹1.7t beating expectations by 76% and earnings per share (EPS) of ₹7.96, an impressive 23%ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, Oil and Natural Gas’ 20 analysts currently expect revenues in 2027 to be ₹6.52t, approximately in line with the last 12 months. Statutory earnings per share are predicted to step up 18% to ₹35.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹6.53t and earnings per share (EPS) of ₹35.52 in 2027. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
View our latest analysis for Oil and Natural Gas
The analysts reconfirmed their price target of ₹281, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. The most optimistic Oil and Natural Gas analyst has a price target of ₹330 per share, while the most pessimistic values it at ₹200. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.5% by the end of 2027. This indicates a significant reduction from annual growth of 11% 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 5.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – Oil and Natural Gas is expected to lag the wider industry.
The Bottom Line
The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that Oil and Natural Gas’ revenue is expected to perform worse 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 in mind, we wouldn’t be too quick to come to a conclusion on Oil and Natural Gas. Long-term earnings power is much more important than next year’s profits. We have estimates – from multiple Oil and Natural Gas analysts – going out to 2028, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Oil and Natural Gas that you need to take into consideration.
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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.
