Jefferies downgrades ONE Gas stock rating on rate concerns

Jefferies recently downgraded ONE Gas Inc. (NYSE: OGS) to a "Hold" rating from "Buy," reducing its price target from $103 to $80. The stock is currently trading at $72.65, close to its 52-week low of $70.37. The downgrade is attributed to higher-than-expected interest rates, lower-than-anticipated earnings for fiscal year 2027, and uncertainties in Texas.

Jefferies also cut its EPS estimates for fiscal years 2027-2030 by 2% to 3%, projecting $4.88 EPS, which is flat year-over-year and 3.5% below consensus estimates. The stock's P/E ratio currently stands at 15.65. Despite being a defensive, well-capitalized local distribution company with a 12-year streak of dividend increases, ONE Gas faces near-term challenges in the current high-interest rate environment.

The company reported strong Q2 2026 results, with adjusted earnings of $0.82 per share, up 52% year-over-year and revenue of $411.63 million, slightly beating estimates. Ladenburg Thalmann upgraded ONE Gas to a "Buy" rating, citing its current market discount.