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What Do Analysts Recommend for NGL Energy?

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Analyst ratings for NGL Energy

In this article, we’ll look at what Wall Street analysts recommend for NGL Energy Partners (NGL). ~50% of analysts rate NGL Energy a “hold,” ~40% rate it a “buy,” and the remaining ~10% rate it a “sell.”

The median broker target price of $15.5 for NGL implies a ~101.3% price return in the next 12 months from its February 9 closing price of $7.7. NGL’s peers Sunoco Logistics Partners (SXL) and Genesis Energy (GEL) have “buy” ratings from 62.5% and 60.0% of analysts, respectively. 72.7% of analysts rate Rose Rock Midstream (RRMS) a “hold.” NGL forms ~0.45% of the First Trust North American Energy Infrastructure Fund (EMLP).

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Outlook for NGL Energy

Investors can consider the following positives and negatives before they decide to include NGL as a long-term investment.

Positives

  • NGL’s assets are diversified across multiple businesses.
  • The $300 million asset sale of TransMontaigne GP is expected to lower NGL’s capital requirements and financial leverage in the coming quarters. Plus, “NGL can reduce leverage further through the sale of its approximately 3.2 million TLP common units.”

Negatives

  • NGL has a relatively volatile cash flow stream because of its high percentage of non-fee-based business. Only 50% of NGL’s earnings were from fee-based sources.
  • The partnership lowered its fiscal 2016 EBITDA guidance.
  • The company is highly leveraged.

For more pre-earnings coverage on midstream companies, check out Market Realist’s Master Limited Partnerships page.

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