Valuation Scorecard: Stock Rating C-Low Neutral (2/27/24)-OGE ENERGY CORP (OGE).

OGE ENERGY CORP’s common shares will need to reach $56 to achieve average annual stock market performance of 9.0% over the next 6 years. OGE ENERGY CORP’s stock price will need to reach $66 by 2028 to achieve upper quartile performance. What is the market’s view of OGE ENERGY CORP’s future operating performance as reflected in the current price of $34?

Executive Summary

• OGE ENERGY CORP’s important characteristics: high financial strength, above average expected growth, high profitability, and instability. A big positive influence on OGE ENERGY CORP’s valuation is its superior Growth.
• Average valuation, below market shareholder returns. Current valuation levels are average relative to the OGE ENERGY CORP Peer Group. Recent market returns have underperformed the OGE ENERGY CORP Peer Group. Total shareholder returns expected to significantly beat the overall equity market. Based on current investor expectations, OGE ENERGY CORP shares should reach a level of $73 by 2028 — an 18.0% per year total shareholder return. A 2028 stock price of $56 would reflect median performance and a price of $66 would be required to reach upper quartile performance.
• Growth has been OGE ENERGY CORP’s biggest valuation strength. Historical growth has been high relative to the OGE ENERGY CORP Peer Group and forecasted growth is relatively high. Revenue Growth has been superior. This factor has buoyed market perceptions of OGE ENERGY CORP. OGE ENERGY CORP’s historical income statement growth has been in line with balance sheet growth. Revenue growth has paralleled asset growth; earnings growth has paralleled equity growth and return on equity has been stable. OGE ENERGY CORP’s consensus growth expectations are in line with past growth.
• Asset Turnover is group leading. This factor has strengthened market perceptions of OGE ENERGY CORP. The company has normal cash needs.
• OGE ENERGY CORP’s risk profile is favorable. Overall variability has been very high with very high revenue variability, only average E.P.S. variability, and above average stock price volatility. Financial Strength is relatively very high and earnings’ expectations are relatively very high. The debt/capital ratio has risen.

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