- Piling up debt at a faster pace than EBITDA growth and the pandemic have negatively impacted NGL's stock price.
- If NGL revenues recover to pre-pandemic levels of 7-8 bn, EBITDA could be 600MM and Free Cash Flow of 100MM to 300MM.
- Clauses in the bonds and preferred shares limit management to use the free cash flow to pay down debt.
- In 2-3 years, NGL would have paid down at least 600MM in debt and the shares could be worth at least $5.25.
- However, if you believe oil prices will plummet, avoid the stock.
For further details see:
NGL Energy Partners LP: Free Cash Flow Will Allow The Company To Delever In The Next 3 Years