Celebrations may be in order for AltaGas Ltd. (TSE:ALA) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following this upgrade, AltaGas' eight analysts are forecasting 2024 revenues to be CA$13b, approximately in line with the last 12 months. Statutory earnings per share are presumed to increase 8.0% to CA$2.23. Before this latest update, the analysts had been forecasting revenues of CA$11b and earnings per share (EPS) of CA$2.23 in 2024. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

Check out our latest analysis for AltaGas  earnings-and-revenue-growth

It may not be a surprise to see that the analysts have reconfirmed their price target of CA$32.27, implying that the uplift in sales is not expected to greatly contribute to AltaGas's valuation in the near term.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.4% by the end of 2024. This indicates a significant reduction from annual growth of 27% 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 4.2% 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 most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at AltaGas.



These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential risks with AltaGas, including recent substantial insider selling. For more information, you can click through to our platform to  learn more about this and the 3 other risks we've identified  .

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