ONE Gas stock rating upgraded by Mizuho to Outperform on regulatory tailwinds

Investing.com - Mizuho upgraded ONE Gas Inc. (NYSE:OGS) from Neutral to Outperform on Friday, while raising its price target to $86.00 from $77.00. The $4.65 billion market cap utility company, known for its low volatility with a beta of 0.84, has demonstrated consistent shareholder returns with 11 consecutive years of dividend increases.

The upgrade comes as Mizuho sees several positive catalysts for the natural gas utility, including benefits from Texas HB 4384 legislation, upcoming regulatory developments, and tailwinds from interest rate trends.

Mizuho highlighted that ONE Gas currently trades at a modest discount to local distribution company (LDC) peers despite being a fully-regulated utility with a strong balance sheet, which historically commanded a premium valuation before the company restated its guidance outlook in 2023/2024.

The firm expects ONE Gas to regain its historical premium valuation as recent and forthcoming positive factors help restore the earnings trajectory the company maintained before its guidance restatement process.

ONE Gas operates as a regulated natural gas distribution utility serving customers across Oklahoma, Kansas, and Texas.

In other recent news, ONE Gas Inc. reported its second-quarter 2025 earnings, which fell short of analyst expectations. The company announced an earnings per share (EPS) of $0.53, slightly below the forecasted $0.54, and revenue of $423.74 million, significantly lower than the expected $531.58 million. Despite the earnings miss, ONE Gas raised its full-year guidance, projecting net income between $261 million and $267 million, with EPS ranging from $4.32 to $4.42. Jefferies, a financial services firm, responded by raising its price target for ONE Gas to $89 from $84, maintaining a Buy rating on the company. The firm cited Texas House Bill 4384 as a notable development, suggesting it could lead to structural earnings improvement for ONE Gas over time. These recent developments highlight the company’s ongoing adjustments and potential growth opportunities in the natural gas sector.

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