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).
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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.
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.