NGL Preferred: Yields Way Too High, Opportunity In Common Units But Higher Risk
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NGL Energy Partners reported a weaker-than-expected Q2 EBITDA due to struggles in its liquids business, leading to a lowered full-year EBITDA guidance and potential asset sales. The water solutions segment performed better, but crude oil logistics underperformed. Preferred units are seen as a better risk/reward option than common units.
November 15, 2024 | 6:15 pm
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NGL Energy Partners' Q2 EBITDA was below expectations due to a weak liquids business, leading to a lowered full-year EBITDA guidance. The company is considering asset sales, and its crude oil logistics underperformed. Preferred units are seen as a better risk/reward option.
The weak Q2 EBITDA and lowered guidance indicate financial struggles, likely impacting NGL's stock negatively in the short term. The consideration of asset sales and underperformance in crude oil logistics further contribute to a negative outlook. However, the preferred units' high yield and lower exposure to volatility provide a more stable investment option.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100