Since my last bullish publication on Noble Midstream Partners (NBLX) in the summer, the stock has returned (18.0%), including distributions. Today, I am downgrading to "sell" after the company reached an agreement with Noble Energy (NBL) regarding the IDRs. The reason for the bearish outlook is summarized in three bullet points:
- Noble Energy eliminated the incentive distribution rights.
- NBLX's operational performance has increased, but it should stabilize at current levels going forward.
- The company will have a tough time covering distribution in 2020.
Noble Energy eliminated the IDRs
A seemingly positive story for