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Western Midstream Partners (NYSE:WES) teetered between small gains and losses in trading Wednesday, as Wolfe Research downgraded the stock to Underperform from Peer Perform with a target price of $25, cautious ahead of another likely disappointing Q2 result.
Wolfe’s Keith Stanley said he sees Western Midstream (WES) tracking low full year-end EBITDA guidance on weaker natural gas liquids prices, downside risks to volume growth, and higher costs, which follow recent challenges with FY’s EBITDA The 2022 comes in at the lower end of the guidance range as well as the soft Q1.
Western Midstream (WES) has been a “leading return on investment story with a solid underlying distribution, newly implemented enhanced distribution that first paid out in Q2 for 2022, and a strong buyback of close to a whopping $500 million last year,” but Stanley thinks this will change as the company invests in two new plants and “seeks to meet its reduced annual debt/EBITDA target at a time when EBITDA growth is yet to materialize.”
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