EnLink's Improving Outlook for 2022
> Taking into account the record first quarter results, the improving volume outlook, and the supportive commodity price environment, EnLink is raising its full-year 2022 guidance. EnLink now expects to report full-year 2022 net income of $315 million to $375 million and adjusted EBITDA of $1.19 billion to $1.25 billion.
> The midpoint of the adjusted EBITDA guidance range represents an increase of 6% over the initial 2022 guidance midpoint and implies 16% growth over full-year 2021.
> Based on current producer activity and plans, EnLink expects a significant increase in volumes in 2023. As a result, EnLink expects to spend $325 million to $365 million on capital projects in 2022. These projects leverage existing infrastructure and have high expected returns and quick paybacks.
> Even with increased investment levels, EnLink is raising full-year 2022 Free Cash Flow After Distributions (FCFAD) guidance to $320 million to $370 million. This result would represent the third consecutive year of FCFAD of over $300 million.
> As a result of the improved financial outlook, EnLink plans to continue to increase the return of capital to common unitholders from FCFAD in 2022.
EnLink Midstream LLC (ENLC) Update - May 12
EnLink Midstream LLC (ENLC) Update - May 12
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: EnLink Midstream LLC (ENLC) Update - May 12
I have updated my forecast/valuation model for EnLink.
At the time of this post ENLC was trading at $9.44.
I have increased my valuation to $12.00/share
Why?
> ENLC is a C-Corp in our High Yield Income Portfolio. It is a midstream company with a market-cap over $4.5 billion.
> Q1 results were good, beating my forecast.
> They raised their revenue and EBITDA guidance for 2022.
> My forecast shows 2022 operating cash flow of $1,031 million, which compares to the midpoint of their capex budget of $345 million.
> Their current dividend is $0.1125/Qtr or annualized yield of $0.45 or 4.77%.
> Based on my forecast, distributable cash flow (DCF) should be approximately $976 million or $2.02 per share. Therefore, I think there is a very good chance that they start ramping up their dividends in 2H 2022.
> The macro outlook for all of the midstream companies looks good. As U.S. oil, gas and NGL production increases, so will the revenues of the midstream companies.
Last week RBC Capital, Raymond James and Mizuho Securities all raised their price targets to $12.00.
TipRanks: "On 5/4/2022, Raymond James analyst Justin Jenkins raised the firm's price target on EnLink Midstream to $12 from $11 and keeps an Outperform rating on the shares following the "impressive beat and raise" in Q1. The analyst thinks EnLink's relative valuation should improve, providing an attractive total return value proposition."
At the time of this post ENLC was trading at $9.44.
I have increased my valuation to $12.00/share
Why?
> ENLC is a C-Corp in our High Yield Income Portfolio. It is a midstream company with a market-cap over $4.5 billion.
> Q1 results were good, beating my forecast.
> They raised their revenue and EBITDA guidance for 2022.
> My forecast shows 2022 operating cash flow of $1,031 million, which compares to the midpoint of their capex budget of $345 million.
> Their current dividend is $0.1125/Qtr or annualized yield of $0.45 or 4.77%.
> Based on my forecast, distributable cash flow (DCF) should be approximately $976 million or $2.02 per share. Therefore, I think there is a very good chance that they start ramping up their dividends in 2H 2022.
> The macro outlook for all of the midstream companies looks good. As U.S. oil, gas and NGL production increases, so will the revenues of the midstream companies.
Last week RBC Capital, Raymond James and Mizuho Securities all raised their price targets to $12.00.
TipRanks: "On 5/4/2022, Raymond James analyst Justin Jenkins raised the firm's price target on EnLink Midstream to $12 from $11 and keeps an Outperform rating on the shares following the "impressive beat and raise" in Q1. The analyst thinks EnLink's relative valuation should improve, providing an attractive total return value proposition."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group