2023-06-26 15:53:33 ET
EnLink Midstream ( NYSE: ENLC ) +3.5% in Monday's trading as UBS initiated coverage with a Buy rating and $14 price target, citing the company's transition from a highly-levered Oklahoma G&P company to an undervalued Permian G&P growth stock with further upside from carbon capture and storage.
UBS analyst Erik Mace said he does not believe EnLink ( ENLC ) shares are pricing in the 24%, 15% and 3% Permian G&P growth in 2023, 2024 and 2025, respectively, that the company forecast.
Mace said EnLink ( ENLC ) is utilizing a portfolio approach maximizing utilization - and thus margin - across its asset base after moving processing plants and building a CCS platform across redundant Louisiana assets, both of which provide operating leverage and margin upside.
The analyst thinks low carbon and CCS opportunities in Louisiana could be ~$300M EBITDA market opportunity under a bull case 30M tons/year reserved capacity scenario, or ~20% of EnLink's ( ENLC ) total earnings by 2030.
More on EnLink Midstream:
Financial and valuation comparison to sector peers
- Analysis: EnLink Midstream: Not The Best Yield But Still Worth Buying For Growth
- Stock price return: Down 18.5% YTD, up 13% in the past 12 months
For further details see:
EnLink Midstream ramps up as UBS starts with Buy rating