Argus Downgrades OGE Energy (OGE) to Hold

Argus analyst Gary Hovis downgraded OGE Energy (NYSE: OGE) from Buy to Hold.

The analyst comments "We are lowering our rating on OGE Energy Corp. (NYSE: OGE) to HOLD from BUY. We like the company's visible forward earnings stream, strong cost controls, well-run generation facilities, and relatively high yield. The company is a pure-play electric utility and has completed the exit from its midstream business. However, near-term earnings and dividend growth are both modest at best. From a technical standpoint, despite a recent rally, the shares are in a bearish pattern of lower highs and lower lows that dates to August 2022. On the valuation fundamentals, the shares are trading at 16-times our 2025 EPS estimate, below the five-year historical average of 18. They also trade at a price/sales ratio of 2.5, below the five-year average of 2.9. We think these valuations are fair, given the modest growth outlook. OGE carries an attractive dividend with a yield of about 4.5% and our long-term rating is still BUY. We may look to move the stock back to our near-term BUY list if earnings growth ramps up toward the upper-single-digit range."

For an analyst ratings summary and ratings history on OGE Energy click here. For more ratings news on OGE Energy click here.

Shares of OGE Energy closed at $36.57 yesterday.

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