2024-06-26 20:59:58 ET
Summary
- Enterprise Products is experiencing growth in the Permian Basin with two new 300MMcf/d gas processing facilities and 3 on the way.
- Despite a bear market for natural gas, the firm is seeing strength in their liquids business, with crude oil and NGL volumes increasing in q1’24.
- Management plans to maintain a high capital budget through eFY24-25 before tapering off in eFY26, leading to significant growth potential for Enterprise.
Enterprise Products ( EPD ) is in a state of continued improvement in the Permian Basin with 3 new gas processing facilities brought online with 3 additional under construction. Though natural gas remains in a bear market domestically, the firm is realizing strength in their liquids business with crude oil and NGL volumes realizing strength in q1’24. Management anticipates to maintain their elevated capital budget throughout eFY24-25 before tapering off in eFY26 as projects come online. Enterprise should realize significant growth as a result, especially as producers favor more liquids-rich basins. I reiterate my BUY recommendation for EPD units with a price target of $35.70/unit at 10x eFY25 EV/aEBITDA....
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Enterprise Product's Growth Doesn't End At 2024