One Gas initiated with a Neutral at Ladenburg

Ladenburg analyst Paul Fremont initiated coverage of One Gas with a Neutral rating and $58 price target. Though the company’s earned returns have been pressured recently by rising interest rates and higher operating and maintenance costs, the firm believes the company will ultimately recover these costs through higher rates as the company plans to file more frequent rate cases and will also likely file more comprehensive general rate cases, the analyst tells investors. The firm is projecting compound annual growth in earnings of 4.9% off the mid-point of the company’s 2023 guidance, which it notes is slightly below the mid-point of the company’s 4%-6% EPS growth target.