2023-03-09 12:02:07 ET
EnLink Midstream ( NYSE: ENLC ) +3.9% in Thursday's trading after Citi upgraded shares to Buy from Neutral with a $13 price target, saying the stock's underperformance does not reflect potential upside from carbon capture and storage.
Commercial carbon capture and storage announcements in the coming months could be a catalyst for the stock and close the valuation gap, Citi's Spiro Dounis said, noting EnLink ( ENLC ) is in discussions for 20M metric tons/year of CCS projects, which could triple the company's CCS portfolio to 30M.
Dounis believes EnLink ( ENLC ) may have a large competitive advantage in launching CCS projects due to its brownfield assets, as the company plans to convert natural gas assets, potentially saving as much as 5x on capex compared to a newbuild option; the analyst also said EnLink "appears to be the natural CO2 transportation partner in the Mississippi River corridor.
EnLink Midstream's ( ENLC ) project roster eventually will drive EBITDA to $1.4B, and the stock is still undervalued, Aaron Goldberg writes in an analysis published recently on Seeking Alpha .
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EnLink Midstream raised to Buy at Citi as CCS potential not priced in