Enterprise Merchandise Companions LP EPD is ready to report third-quarter 2024 outcomes on Oct. 29, 2024, earlier than the opening bell.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 66 cents per share, implying development of 10% from the year-ago reported quantity. The estimate was revised downward by one analyst up to now seven days towards no upward motion. The Zacks Consensus Estimate for third-quarter revenues is at present pegged at $13.7 billion, suggesting a 14.3% uptick from the year-ago actuals.
Discover the most recent EPS estimates and surprises on Zacks Earnings Calendar.
Picture Supply: Zacks Funding Analysis
EPD beat the consensus estimate for earnings in two of the trailing 4 quarters and missed the identical twice, with the typical shock being 1.48%. That is depicted within the graph under:
EPD’s Q3 Earnings Whispers
Our confirmed mannequin doesn’t predict an earnings beat for EPD this time round. The mix of a optimistic Earnings ESP and a Zacks Rank #1 (Robust Purchase), 2 (Purchase), or 3 (Maintain) will increase the probabilities of an earnings beat. That’s not the case right here.
The partnership has an Earnings ESP of -1.06% and at present carries a Zacks Rank #3. You’ll be able to see the complete list of today’s Zacks #1 Rank stocks here.
You’ll be able to uncover one of the best shares to purchase or promote earlier than they’re reported with our Earnings ESP Filter.
EDP Elements to Word
Enterprise Merchandise is among the many main suppliers of midstream companies in North America. The partnership is more likely to have generated steady fee-based revenues within the September quarter, with its pipeline community spreading throughout 50,000 miles, transporting pure gasoline, NGLs, crude oil, refined merchandise and petrochemicals. The partnership can also be more likely to have generated steady cashflows with a storage capability of greater than 300 million barrels for NGLs, crude oil, petrochemicals and refined merchandise.
The Zacks Consensus Estimate for the gross working margin from Enterprise Merchandise’ NGL Pipelines & Companies enterprise phase is pegged at $1,339.6 million, larger than the $1,196 million recorded a yr in the past. The rising demand for NGL, utilized in numerous purposes corresponding to house heating, plastic manufacturing and gas, is more likely to have pushed elevated exercise within the NGL Pipelines & Companies enterprise unit.
The Zacks Consensus Estimate for the gross working margin from Enterprise Merchandise’ Pure Gasoline Pipelines & Companies enterprise phase is pegged at $295.1 million, larger than the $239 million recorded a yr in the past. The rising demand for pure gasoline as a cleaner-burning gas is anticipated to have elevated the necessity for midstream belongings to move and retailer bigger volumes, contributing to the partnership’s Pure Gasoline Pipelines & Companies enterprise phase.
EPD’s Inventory Worth Efficiency & Valuation
EPD’s inventory has soared 13.5% over the previous yr in contrast with the energy sector’s rise of 5.8%. Kinder Morgan, Inc. KMI and Enbridge Inc. ENB, two different main midstream vitality gamers, have gained 57% and 37.7%, respectively.
One-Yr EPD, KMI, ENB Inventory Worth Chart
Picture Supply: Zacks Funding Analysis
EPD seems comparatively overvalued, suggesting the potential for worth decreases. The partnership’s present trailing 12-month enterprise worth/earnings earlier than curiosity, tax, depreciation and amortization (EV/EBITDA) ratio is 9.74, which is buying and selling at a premium in comparison with the vitality sector common of three.35.
Picture Supply: Zacks Funding Analysis
Funding Thesis of EPD
Enterprise Merchandise has low publicity to quantity and commodity worth dangers. This is because of the truth that its midstream belongings are contracted by shippers for the transportation of pure gasoline, NGLs, crude oil, refined merchandise and petrochemicals over prolonged intervals. Thus, the partnership will proceed to generate steady fee-based revenues. EPD will safe extra cashflows because it has $6.7 billion of permitted key initiatives below development.
Along with growing its distribution for 26 consecutive years, the partnership boasts a robust credit standing. Nevertheless, a lot of EPD’s belongings have been operational for a major interval and thus necessitate appreciable funding in upkeep. As these belongings age, they require frequent and infrequently expensive repairs to make sure they proceed to operate successfully and safely.
Final Phrase
Though Enterprise Merchandise has a steady enterprise mannequin, buyers ought to look forward to a greater entry level because the partnership is overvalued in comparison with the vitality sector.
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Enterprise Products Partners L.P. (EPD) : Free Stock Analysis Report
Enbridge Inc (ENB) : Free Stock Analysis Report
Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
