Long Trade Idea
Enter your long position between $172.09 (an intermediate horizontal support level) and $174.57 (the intra-day high of its recent uptrend).
Market Index Analysis
- Atmos Energy (ATO) is a member of the S&P 500 Index.
- This index trades inside a bearish chart pattern with rising bearish trading volumes.
- The Bull Bear Power Indicator of the S&P 500 Index is bullish but below its descending trendline.
Market Sentiment Analysis
Equity futures are trading higher this morning, but are coming off their highs, as markets brace for the delayed January NFP report. It is likely to inject volatility and direct price action. While economists expect a median gain of 68,000 jobs with an unchanged unemployment rate of 4.4%, it could surprise on the downside. The government has already downplayed the importance of this report, and the next review is likely to show an overall reduction in jobs over the past year. A weak number could add to selling pressure after weak December retail sales, and the software sell-off sparked by AI.
Atmos Energy Fundamental Analysis
Atmos Energy is one of the largest US natural-gas-only distributors, serving approximately 3,000,000 customers in nine states. It also manages company-owned natural gas pipelines and storage assets.
So, why am I bullish on ATO following its earnings beat?
ATO beat on the top and bottom line, reporting revenues of 1.34 billion and earnings per share of $2.44. I am bullish on Atmos Energy for its upbeat 2026 guidance, profit margins above 25%, which is high for a utility company, and net customer additions of 54,000 over the past year. It has outperformed peers and its sector, and I see more upside ahead as its $2.6 billion in infrastructure investments help it expand market share and attract more customers, including data centers.
MATOic | Value | Verdict |
P/E Ratio | 22.74 | Bearish |
P/B Ratio | 2.02 | Bullish |
PEG Ratio | 2.11 | Bullish |
Current Ratio | 1.13 | Bearish |
ROIC-WACC Ratio | Negative | Bearish |
The price-to-earning (P/E) ratio of 22.74 makes ATO an expensive stock compared to its peers but inexpensive relative to the S&P 500. By comparison, the P/E ratio for the S&P 500 is 29.59.
The average analyst price target for ATO is $176.82, suggesting limited upside potential, but I see price action drifting into the high-end of estimates at $193.00, while downside risks are reasonable.
Atmos Energy Technical Analysis
Today’s ATO Signal
- The ATO D1 chart shows price action inside a bullish price channel.
- It also shows price action breaking out above its ascending Fibonacci Retracement Fan.
- The Bull Bear Power Indicator is bullish with an ascending trendline.
- The average bullish trading volumes are higher than the average bearish trading volumes.
- ATO is moving higher with the S&P 500 Index, a bullish confirmation
My ATO Long Stock Trade
- ATO Entry Level: Between $172.09 and $174.57
- ATO Take Profit: Between $189.14 and $193.00
- ATO Stop Loss: Between $163.57 and $165.89
- Risk/Reward Ratio: 2.00
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