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BPL Trading Close to 4-Year Lows: Can It Gain Upward Momentum?

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BPL Trading Close to 4-Year Lows: Can It Gain Upward Momentum? PART 1 OF 4

Can Buckeye Partners Gain Momentum Going Forward?

Buckeye Partners’ recent market performance

Buckeye Partners’ (BPL) stock performance has been very weak for most of October 2017. The partnership is currently trading close to its four-year lows. BPL saw a new 52-week low of $50.90 on October 25. 

However, BPL has recovered slightly since then. Overall, BPL has lost ~6.0% since the beginning of October. The Alerian MLP ETF (AMLP), which comprises 25 energy MLPs, has lost 2.9% during the same period.

Can Buckeye Partners Gain Momentum Going Forward?

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BPL’s recent weakness could be primarily attributed to the continued decline in the Eagle Ford drilling activity. Buckeye Partners has significant exposure to the Eagle Ford Basin. According to the recent rigs report by Baker Hughes, the total rig count in the region fell to 65 on October 27 compared to 84 at the end of 2Q17.

BPL has lost ~16% since the beginning of 2H17. BPL’s weak performance during the third quarter could be attributed to the impact of the string of hurricanes on the partnership’s operations, weak Eagle Ford Basin activity, and volatility in commodity prices.

Buckeye Partners’ year-to-date performance

The partnership has lost a massive 18.9% in 2017 year-to-date. Among BPL’s peers, Kinder Morgan (KMI), Magellan Midstream Partners (MMP), and NuStar Energy (NS) have lost 12.5%, 9.7%, and 33.0%, respectively, year-to-date.

During the same period, AMLP has lost 13.5%. BPL is underperforming AMLP by 540 basis points, and the partnership is currently trading close to its four-year lows.

Series overview

In this series, we’ll learn whether BPL can gain upward momentum from here. We’ll look into BPL’s technical indicators and price forecast. We’ll also look into the partnership’s valuation and analyst recommendations.

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