As you might know, DT Midstream, Inc. (NYSE:DTM) just kicked off its latest quarterly results with some very strong numbers. The company beat expectations with revenues of US$244m arriving 2.8% ahead of forecasts. Statutory earnings per share (EPS) were US$0.98, 7.9% ahead of estimates. 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.
Taking into account the latest results, DT Midstream's seven analysts currently expect revenues in 2024 to be US$966.6m, approximately in line with the last 12 months. Statutory earnings per share are expected to shrink 6.7% to US$3.89 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$981.6m and earnings per share (EPS) of US$3.90 in 2024. 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.
The analysts reconfirmed their price target of US$70.88, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on DT Midstream, with the most bullish analyst valuing it at US$78.00 and the most bearish at US$60.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting DT Midstream is an easy business to forecast or the the analysts are all using similar assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that DT Midstream's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 5.1% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than DT Midstream.
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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$70.88, with the latest estimates not enough to have an impact on their price targets.
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 2026, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with DT Midstream .
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