What Analysts Recommend for EnLink Midstream after 3Q16 Earnings



Analyst ratings for EnLink Midstream Partners

In this final part of the series, we’ll look at Wall Street analysts’ recommendations for EnLink Midstream Partners (ENLK). At a broader level, 52.9% of analysts rate it a “hold,” 41.2% rate it a “buy,” and the remaining 5.9% rate it a “sell.”

The above table shows recommendations for ENLK from some of the brokers surveyed. The high and low target prices for ENLK are $22 and $16, respectively. The median target price of $19 implies a 14.1% price return in the next 12 months from its November 1, 2016, closing price of $16.70.

ENLK’s peers DCP Midstream Partners (DPM) and Crestwood Equity Partners (CEQP) have “hold” ratings from 76.9% and 77.8% of analysts, respectively.

About 66.7% of analysts have rated EnLink Midstream LLC (ENLC) a “hold.” ENLC is EnLink Midstream Partners’ general partner.

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What to consider before investing

You should consider the following positives before deciding to include ENLK in your long-term investments:

  • significant expansion opportunities in some of the prolific shale plays such as the Permian and the STACK
  • possible benefit from the rise in natural gas demand from power utilities, LDCs (local distribution companies), and LNG (liquefied natural gas) exports in the long run

You should also consider the following negatives before deciding to include ENLK in your long-term investments:

  • declining throughput volumes at ENLK’s Texas and Crude and Condensate segments due to production-related shut-ins
  • low distribution coverage despite flat distributions
  • exposure to natural gas prices through its natural gas processing business
  • the fact that it’s highly leveraged

For more post-earnings coverage on midstream companies, check out our Master Limited Partnerships page.


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