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Crestwood Midstream’s Outlook for the Rest of 2015

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Nov. 20 2020, Updated 12:21 p.m. ET

Crestwood Midstream’s outlook

According to Wall Street analysts’ estimates, Crestwood Midstream Partners’ (CMLP) distributions are expected to stay flat for the rest of 2015. This is assuming that the simplification merger isn’t complete by then.

According to Crestwood’s management, the merger deal is “2% dilutive to CMLP in 2016, 3% accretive in 2017, substantial accretion thereafter.” This would depend on the combined entity’s ability to grow its distributable cash significantly from expansion projects and a recovery in commodity prices.

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Analysts’ ratings

On a broader level, ~75% of the analysts surveyed by Bloomberg rate Crestwood Midstream Partners a “hold” and the remaining ~25 % rate it a “buy.” The MLP has no “sell” recommendations.

The consensus target price of $12.33 for Crestwood Midstream would imply an ~36.70% return in the next 12 months. Its peers, MarkWest Energy Partners (MWE) and ONEOK Partners (OKS) have “hold” ratings from 72.20% and 56.30% of the analysts surveyed, respectively. It’s important to note that 58.30% and 46.20% of the analysts rated EnLink Midstream Partners (ENLK) and DCP Midstream Partners (DPM) as “buy,” respectively. Crestwood Equity Partners (CEQP) is Crestwood Midstream’s general partner. It has “hold” ratings from 60% of the analysts surveyed.

Individual ratings

Here are some of the recent analyst ratings for Crestwood Midstream after the 2Q15 earnings:

  • Wells Fargo Securities (WFC) and Raymond James have rated Crestwood Midstream as “outperform.” This is equivalent to “buy.” Raymond James has assigned a price targets of $14. This would imply an ~55.20% in price return over the next 12 months.
  • Stifel rated Crestwood Midstream a “hold” with no associated price target.
  • Ladenburg Thalmann & Co. and Hilliard Lyons rated Crestwood Midstream a “neutral.” This is equivalent to “hold.” They gave no associated price targets.

Key ETFs and stocks

Investors can get direct exposure to Crestwood Midstream by buying its common units that are listed on the NYSE. Indirect exposure is possible through ETFs like the Global X MLP ETF (MLPA). Crestwood Midstream accounts for ~1.05% of MLPA.

For more earnings coverage on midstream companies, visit Market Realist’s Master Limited Partnerships page.

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