Dallas, Texas-based Atmos Energy Corporation (ATO) distributes natural gas. With a market cap of $28.4 billion, the company provides natural gas marketing and procurement services to large customers, as well as manages storage and pipeline assets.
Shares of this leading natural gas utility have underperformed the broader market over the past year. ATO has declined slightly over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 18.3%. In 2026, ATO stock is up marginally, compared to the SPX’s 11.8% rise on a YTD basis.
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Narrowing the focus, ATO’s underperformance is also apparent compared to the State Street Utilities Select Sector SPDR ETF (XLU). The exchange-traded fund has gained about 1.6% over the past year. Moreover, the ETF’s 1.2% returns on a YTD basis outshine the stock’s marginal gains over the same time frame.
www.barchart.com ATO has underperformed primarily due to sector-wide macro pressures from elevated interest rates, persistent capital expenditure demands, and repeated revenue misses, leaving investors cautious about near-term upside. Although the company continues to deliver reliable regulated returns, capital rotation away from traditional utilities and into high-growth cyclical sectors has further muted market enthusiasm for defensive utility plays.
On Aug. 5, ATO shares closed down marginally after reporting its Q3 results. Its EPS of $1.43 exceeded Wall Street expectations of $1.34. The company’s revenue was $879.1 million, missing Wall Street forecasts of $1 billion. ATO expects full-year EPS to be $8.40 to $8.50.
For the current fiscal year, ending in September, analysts expect ATO’s EPS to grow 13.4% to $8.46 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 16 analysts covering ATO stock, the consensus is a “Hold.” That’s based on three “Strong Buy” ratings, and 13 “Holds.”
www.barchart.com This configuration is more bullish than two months ago, with two analysts suggesting a “Strong Buy.”
On Aug. 21, Morgan Stanley (MS) analyst David Arcaro kept an “Equal Weight” rating on ATO and lowered the price target to $190, implying a potential upside of 13.2% from current levels.
The mean price target of $186.28 represents an 11% premium to ATO’s current price levels. The Street-high price target of $206 suggests an upside potential of 22.8%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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