UBS Reiterates Buy on NGL Energy Partners (NGL) Following 2Q Report
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UBS maintained a Buy rating on NGL Energy Partners (NYSE: NGL), and cut the price target to $21.00 (from $22.00), following the company's 2Q earnings report. NGL reported EBITDA of $75.4mm, above the Consensus of $74.3mm. As expected, DPU remained at $0.39 with 0.95x coverage, which is below 1.0x due to it being a seasonally weak quarter in propane.
Analyst Shneur Gershuni commented, "NGL's FY2Q17 hit our EBITDA estimates and exceeded our DCF expectations; additionally management suggested FY18 could be as high as $600mm. Results in the water segment improved sequentially and exceeded expectations with NGL's exposure to the Delaware basin where we are seeing increased activity. Grand Mesa is now online and EBITDA is expected to ramp from $50mm in FY17 to $135mm in FY19. On the distribution front, management suggested the distribution has the potential to initially step-up to $2 in FY18 and grow mid-single-digits, thereafter. Our take is the valuation is relatively compelling with ramping EBITDA & DCF, falling leverage metrics and the potential for a sizable distribution step-up next year."
Shares of NGL ENERGY closed at $17.30 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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