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Reading the Moving Averages and Analyst Estimates for Midstream Energy Companies

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Midstream companies’ moving averages show strong resistance

As of January 26, 2016, the 100-day moving averages of midstream companies’ stocks have shown strong resistance. Except Spectra Energy Corporation (SE) other midstream companies in the following table are trading below their 100-day moving averages, as of yesterday’s close. On average, midstream companies are trading 23% below their 100-day averages.

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A question of how far below the 100-day average

As of January 26, Kinder Morgan (KMI) and Williams Companies (WMB) were trading 36.2% and 40.1%, respectively, below their 100-day moving averages. Spectra Energy Partners (SEP) is trading 3.5% below its 100-day moving average. This is close to the performance of other midstream companies. The stock continued to struggle to cross its 100-day moving average.

Wall Street analyst consensus estimates

Wall Street analyst consensus estimates suggest an impressive 52% upside for these US (SPY) midstream companies, compared to the 50.4% upside consensus estimate for large-cap upstream companies. Over the next 12 months, midstream operators Williams Companies and Energy Transfer Partners (ETP) could see rises of 63% and 53%, respectively, from their current levels, as of January 26, 2016.

Below is a rundown of three other midstream operators and Wall Street analyst estimates for each company over the next 12 months:

  • Plains All American Pipeline (PAA) could see a 39% rise.
  • Spectra Energy Corporation could rise by 22%.
  • Williams Partners (WPZ) could see a 59.2% rise.

Interestingly, the forward price-to-earnings ratios for the coming year suggest that Magellan Midstream Partners (MMP) and ETP are cheaper than other MLPs.

In the next and final part of this series, we’ll discuss the moving averages and analyst estimates for clean energy companies.

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