Updated Aug 6 at 1:56pm ET.
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The company reported second-quarter profit of $1.53 per share, which was higher than the $1.46 analysts expected. Revenue reached $12.05 billion, far ahead of the $8.95 billion forecast. The strong results were led by a 15 percent jump in natural gas liquids (NGLs), the liquids like propane and butane that are separated from natural gas, and a 12 percent rise in refined product shipments.
Because of this momentum, management raised its full-year profit goal to about $3.5 billion. This is the second time this year they have increased their targets. It shows that the company is successfully moving more energy through its pipes, which generates steady fees regardless of where oil and gas prices sit. If they can keep this volume growth up while managing the costs of their recent acquisitions, the business remains a very healthy cash generator.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
The company submitted a formal filing to confirm the completion of an asset acquisition or sale. This follows a period of heavy deal-making where the business has been buying up other pipeline networks to grow its reach.
For those holding the stock, these filings are the official confirmation of the strategy to capture more fees across the energy chain. While the filing itself is a routine step, it ensures the company is keeping the public updated on its changing asset base.
Source: 8-K filing
Morgan Stanley analysts shifted their view on the stock to Equal Weight, which means they expect it to perform in line with the broader market rather than lead it. They set a price target of $103.
This change suggests that while the business is performing well, much of that success might already be reflected in the current stock price. For long-term owners, the core story of steady fee-based income hasn't changed, but this move reflects a view that the stock may have less room for a quick jump from here.
Source: Morgan Stanley
Jefferies downgraded the stock to a Hold rating, signaling a more cautious stance on how much the share price can grow in the near term. They set a target price of $95.
This type of move often happens when a stock has performed well and analysts want to see more evidence that the company can continue to grow its profits before recommending more buying. It doesn't signal a problem with the pipelines themselves, but rather a pause in expectations for the stock's performance.
Source: Jefferies
The board of directors declared a quarterly dividend of $1.07 per share, which is the same amount as the previous quarter. This adds up to a yearly payout of $4.28 for every share owned. For many who own this stock, the dividend is the primary reason to hold it. Keeping the payout steady shows that the company is generating enough cash from its pipelines to reward owners while still having money left over to pay down debt from its recent acquisitions.
Source: Globe News Wire
Analysts have recently turned more cautious, with several downgrades occurring throughout July. Overall, 17 of 39 analysts rate the stock a buy, and the average target of $92 suggests a 5% gain from today's price.
Management has a habit of setting reachable goals and clearing them, beating expectations in five of the last eight quarters while growing revenue by over 50 percent.
| Expectation | |
|---|---|
| EPS | $1.46 |
| Revenue | $9.37B |
