Summary
- CrossAmerica Partners enjoyed extraordinary times during the first half of 2022 with their financial performance benefiting from record wholesale fuel margins.
- This saw relatively strong free cash flow that almost managed to cover their distribution payments, which is a rare feat for this partnership.
- Whilst positive, there is far more downside than upside from this point and even more importantly, their liquidity sees a significant risk within as little as 30 days.
- After September ends, the covenant for their credit facility sees the limit for their leverage ratio reverting below its current level.
- This sees them skating on very thin ice, I believe that downgrading to a sell rating is now appropriate.
For further details see:
CrossAmerica Partners: Record Margins, Still Skating On Very Thin Ice