EQT Midstream Has ~50% Upside Potential
EQT Midstream Partners (EQM), an Appalachian-based midstream MLP formed by EQT Corporation (EQT) to provide natural gas gathering, compression, transportation, and storage services, is among Credit Suisse’s (CS) top five energy five picks.
EQM has gained 21.4% since its multiyear low at the beginning of 2016. According to Credit Suisse’s target price estimates, the partnership still has an upside potential of over 50%. Kinder Morgan (KMI), a midstream energy giant but not an MLP, is also among Credit Suisse’s top five energy MLPs. For details on KMI, read Why Kinder Morgan Is at the Top of Investors’ Wish Lists.
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In this series, we’ll look at why EQT Midstream is a top pick, and analyze EQM’s operating performance, balance position, and cash flow measures. Following an analysis of EQM’s financial statements, we’ll look into its valuation, key performance indicators, and analyst projections. Let’s start with EQM’s YTD (year-to-date) market performance.
EQT Midstream’s market performance
The partnership has lost 4.5% YTD. In comparison, peers Williams Partners (WPZ) and Antero Midstream Partners (AM) have gained 22.0% and 22.7%, respectively. The Alerian MLP ETF (AMLP), which comprises 26 midstream energy MLPs, has gained 0.9%. EQM is still trading lower than it was before the rout in energy prices.
A look at EQM’s moving averages
Currently, EQM is trading 3.1% below its 50-day moving average and 5.2% below its 200-day moving average. The 50-day moving average went below the 200-day moving average in mid-November 2016, which may indicate a bearish trend.