The case for & against
Bull & Bear analysis
Bullish
NGL Energy Partners LP (NYSE: NGL) is a leading player in the oil and gas logistics sector, primarily operating in water solutions and crude oil logistics. The company is strategically positioned at a critical juncture in the energy value chain, focusing on providing essential services such as water disposal for oil extraction, which underscores its importance in the ongoing energy transition. With its focus on operational efficiency and expanding logistical capabilities, NGL Energy is positioned to capitalize on the growing demand for water disposal services and related infrastructure development in the oil and gas industry.
Bull says
- ↑Q1 adjusted EBITDA $186.2M, +30% YoY driven by water services
- ↑Produced water disposal at 3.32M bbl/d, +19.6% YoY
- ↑Raised fiscal 2027 EBITDA guidance by $10M to $725–735M
- ↑Directors increased share purchases, signaling strong insider conviction
- ↑High revisions and momentum factors indicate positive investor sentiment
- ↑Flat long-term debt and declining leverage each quarter support balance sheet
Bear says
- ↓Negative earnings and dividend yields reflect ongoing unprofitability
- ↓Analysts warn stock may be overvalued despite strong guidance
- ↓Over $200M planned growth capex raises execution and timing risks
- ↓High short interest suggests market skepticism about future performance
- ↓Regulatory scrutiny on water disposal could drive up compliance costs
- ↓Negative liquidity factor points to potential cash flow management challenges
Earnings Call · Q3 2024 · Mgmt. Guidance
Updated 02-11-2025neutral
Transcript signals
Bull points
- we've got hedges. We've hedged the skim oil with costless collars that could be rolling through that line item. Let us look at that real quick, and we can circle back with you, Paul, if that's not [inaudible] composition, we had about 80% to 90% of our skim oil hedged with collars through the end of the fiscal year.
- very excited about is the total capacity is 500,000 barrels. So we have a couple of hundred thousand barrels of capacity to sell to other producers. So ultimately, the return or the rate of return is going to be very attractive.
- very excited about is the total capacity is 500,000 barrels. So we have a couple of hundred thousand barrels of capacity to sell to other producers. So ultimately, the return or the rate of return is going to be very attractive.
Bear points
- Yes. We've got maybe a smaller contract that's rolling off towards the latter part of this calendar year and then the second contract of size equivalent to one that just rolled out has another couple of years on it.
- So I would say we have to do something in the next 3.5 years.
- So I would say we have to do something in the next 3.5 years.
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