UPDATE: UBS Upgrades EnLink Midstream, LLC (ENLC) to Buy
UBS analyst Shneur Gershuni upgraded EnLink Midstream, LLC (NYSE: ENLC) from Neutral to Buy with a price target of $6.00 (from $4.50).
The analyst comments "We are upgrading ENLC to Buy from Neutral as we see ENLC sporting modest EBITDA growth in ’22 post bottoming out in ’21 in contrast to broad investor expectation of a flat to down trajectory. The key differentiator is our view that OK segment stabilizes supported by recent rig additions to the Anadarko. The earnings pivot supports ENLC’s leading FCF yield of ~32% (vs. peers of ~14%) and trades at ’22E EV/EBITDA multiple of 6.2x, a significant discount to G&P peers of 7.7x. While COVID S/D shocks took a toll on G&P’s in ‘20, ENLC began its lean transformative story back in ‘19 to optimize assets and remove costs from its business as ENLC pivoted from an OK levered G&P to a Permian and LA Growth Story. ENLC optimization efforts allowed for a ~23% reduction in its cost structure YoY in '20, a dist reset, a considerable step-down in capex which has since supported ENLC’s elevated FCF yield which should support rapid de-leveraging below 4.0x in ’22."
Shares of EnLink Midstream, LLC closed at $4.36 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Upgrades, Upgrades
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