- Genesis Energy posted 4Q21 results below forecast and 2022 guidance was light as well.
- But the miss doesn’t matter. The sale of a 36% stake in CHOPS implies an Offshore Pipeline Segment value of $3.8B, assuming the 2022 segment margin guidance midpoint is achieved.
- Moreover, the sale of a neighboring soda ash facility implies a value of Genesis Energy’s Soda Ash capacity at $2.8B alone.
- Averaging EV/EBITDA-based valuation and sum of the parts implies Genesis units could triple by the end of 2024.
- We forecast Genesis Energy’s balance sheet to hit the high 3’s Debt/EBITDA leverage metrics by YE2023 and allow the distribution to more than triple from the current $0.60/unit/year to ~$2/unit/year by 1H24.
For further details see:
Genesis Energy: Buy The Dip. Despite 2022 Guidance Below Forecast, We Explain Why We Believe Genesis Is Still A Double+ The Next Two Years