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Quarterly Results Roundup: MLPs' Performance in 3Q17

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Part 7
Quarterly Results Roundup: MLPs' Performance in 3Q17 PART 7 OF 14

Antero Midstream Partners Misses Earnings Estimates

Earnings in 3Q17

Antero Midstream Partners’ (AM) earnings took a breather in 3Q17 after five consecutive quarters of EBITDA (earnings before interest, tax, depreciation, and amortization) growth. AM’s adjusted EBITDA fell to $128 million in 3Q17 from $139 million in 2Q17. However, YoY (year-over-year), the partnership’s EBITDA were up 15.7%. AM’s strong YoY growth in the third quarter was due to its strong gathering and compression volumes, which were driven by strong production growth from Antero Resources (AR).

Antero Midstream Partners Misses Earnings Estimates

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Distribution in 3Q17

Antero Midstream Partners declared a distribution of $0.34 per unit in the third quarter, which represents a 28% rise from 3Q16 and a 6% rise from 2Q17. AMGP GP LLC (AMGP), AM’s general partner, announced a distribution of $0.06 per unit in the third quarter, marking AMGP’s first full quarterly distribution since its initial public offering. AM and AMGP are trading at distribution yields of 4.9% and 1.4%, respectively.

Analysts’ recommendations

All analysts surveyed by Reuters had rated Antero Midstream Partners a “buy” as of November 8. Seaport Global has recently initiated coverage on Antero Midstream, and assigned it a “buy” rating. Of the 16 analysts surveyed, eight rated AM as a “strong buy,” while the remaining eight rated it as a “buy.” AM is currently trading significantly below the low range ($38) of analysts’ target price. AM’s average target price of $41.30 implies a massive upside potential of 50.0% based on its current price.

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