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CONE Midstream (CNNX) Up to Strong Buy on Solid Results

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On Aug 30, 2016, Zacks Investment Research upgraded CONE Midstream Partners LP to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

CONE Midstream Partners has been witnessing rising earnings estimates on the back of strong performances over the last few quarters. This oil & gas pipeline operator delivered positive earnings surprises in each of the last four quarters, with an average beat of 19.38%. The long-term expected earnings growth rate for this stock is 9.7%.

The partnership is also gaining from its cost control and operating efficiencies, which is boosting its margins. A solid financial position enabled management to raise its quarterly cash distribution to 25.4 cents per unit reflecting 15.5% year-over-year growth.

CONE Midstream Partners has a long-term fixed-fee gathering agreement with its sponsors, CONSOL Energy (CNX - Free Report) and Noble Energy . CONE Midstream Partners’ sponsors have a strong position in the resource-rich Marcellus Shale and Utica Shale, which assures strong volumes for the partnership.

CONE MIDSTREAM Price and Consensus

 

CONE MIDSTREAM Price and Consensus | CONE MIDSTREAM Quote

Thanks to its solid performance over the last few quarters, the partnership’s management raised its 2016 adjusted EBITDA guidance to the range of $96–$106 million, up from the earlier expected range of $93–$103 million. Full-year distributable cash flow attributable to the partnership is now expected to be in the range of $82–$92 million, up from the previous projection of $79–$89 million.

The Zacks Consensus Estimate for 2016 increased 5.6% to $1.51 as 50% of the estimates were revised higher over the last 60 days. We see a similar trend for 2017 as well, with 50% estimates going up over the same time frame, lifting the Zacks Consensus Estimate by 8.4% to $1.55.

Another Stock to Consider

Investors interested in the Oil and gas pipeline industry may also consider Enbridge Energy Partners, L.P. , which sports a Zacks Rank #1.

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