Western Gas Partners’ market performance
In this part of the series, we’ll look at Western Gas Partners’ (WES) updated guidance and analyst recommendations. But first, let’s look at the company’s market performance.
WES shares rallied 3.3% on Wednesday, July 27, 2016, following the company’s 2Q16 earnings release. At the same time, the Alerian MLP ETF (AMLP), which is comprised of 24 midstream energy MLPs, fell 0.4%. WES’s rally could be attributed to its strong 2Q16 earnings and an upward revision of 2016 EBITDA (earnings before interest, tax, depreciation, and amortization) and capex (capital expenditure) guidance.
WES has returned 5.6% since the beginning of 2016. Peers Antero Midstream Partners (AM), Rice Midstream Partners (RMP), and EQT Midstream Partners (EQM) have returned 12.8%, 40.3%, and 1.3%, respectively, in 2016.
WES increased its 2016 EBITDA guidance to $930 million–$970 million from its earlier guidance of $860 million–$950 million. At midpoint, this represents a $45 million increase. The increase in guidance is mainly due to the startup of new processing plants. The partnership also increased its 2016 capex guidance by $40 million.
Analyst ratings for Western Gas Partners
On a broader level, 56.3% of analysts rate WES a “buy,” and the remaining 43.7% rate it a “hold.” The high and low target prices for WES are $66 and $51, respectively. The median target price of $56 implies an 11.4% price return in the next 12 months from its July 27, 2016, closing price of $50.30.
For more post-earnings coverage on midstream companies, check out our Master Limited Partnerships page.