We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
NGL Raises 2027 EBITDA Guidance on Water Growth, LEX II
Read MoreHide Full Article
Key Takeaways
NGL lifts fiscal 2027 adjusted EBITDA outlook to $725-$735M, implying roughly 10% year-over-year growth.
Record water disposal volumes helped drive a 29.3% rise in quarterly adjusted EBITDA.
LEX II adds 560,000 barrels per day of water capacity, while high spending delays much of the returns.
NGL Energy Partners LP (NGL - Free Report) raised fiscal 2027 adjusted EBITDA guidance to $725-$735 million from $715-$725 million after a strong fiscal first quarter led by Water Solutions. Record disposal volumes and contracted infrastructure growth strengthened the near-term earnings picture.
The next test is whether that momentum extends into fiscal 2028. LEX II, heavy growth spending and greater dependence on water make execution and customer activity central to the outlook.
NGL's Water Volumes Powered the Q1 Beat
Fiscal first-quarter adjusted earnings of 17 cents per unit topped the Zacks Consensus Estimate of 11 cents. Revenues surged 59.1% year over year to $990 million, while physical water disposal volumes reached a record 3.32 million barrels per day.
Water Solutions adjusted EBITDA increased 25.9% to $179.9 million from $142.9 million. Consolidated adjusted EBITDA from continuing operations rose 29.3% to $186.2 million, supported by higher contracted producer volumes and pipeline revenues.
NGL's Raised Guidance Extends the Earnings Story
The new $725-$735 million fiscal 2027 adjusted EBITDA range implies roughly 10% growth from fiscal 2026. Management raised the outlook by $10 million at both ends and expects Water Solutions to remain the main driver.
Producer commitments support that view. The 500,000 barrels per day signed in fiscal 2026 are flowing into fiscal 2027 results, while NGL added more than 200,000 barrels per day of commitments during the first quarter.
NGL's LEX II Adds Contracted Water Capacity
The LEX II Extension will expand the LEX Pipeline System to 81 miles and provide about 560,000 barrels per day of produced-water transportation capacity. A long-term volume commitment contract underwrites the project, which is expected in service by the end of calendar 2026.
Image Source: NGL Energy Partners LP
The buildout fits a broader Permian water-infrastructure theme. Texas Pacific Land Corporation (TPL - Free Report) provides sourcing, gathering, treatment, recycling and disposal services across the basin. Select Water Solutions, Inc. (WTTR - Free Report) closed its Pilot Water Solutions acquisition on Nov. 2, 2026, expanding its Delaware Basin water-midstream position.
NGL's Growth Spending Pushes Returns Into 2028
Fiscal 2027 growth capital expenditures are expected to exceed $200 million, with spending concentrated in the first half. Much of the related EBITDA is expected in fiscal 2028, making project completion and customer-volume ramp-up important to the next leg of growth.
First-quarter operating cash flow was about $77 million versus $108.8 million of capital expenditures. NGL had roughly $203.6 million of liquidity at June 30, 2026, keeping capital discipline important while expansion spending remains elevated.
NGL's Guidance Still Faces Execution Risks
Water Solutions generated about $603 million of NGL's roughly $660 million in fiscal 2026 adjusted EBITDA from continuing operations. That concentration increases exposure to weaker Delaware Basin producer activity, even with long-term contracts providing some protection.
Restrictions tied to underground injection, seismic activity or tighter permitting could limit disposal options, raise transportation or treatment costs, or slow capacity additions. Project delays could also push returns from current investment further out.
NGL's Scores Support Growth but Flag Momentum
NGL's raised guidance, record water volumes and contracted LEX II expansion support the growth narrative, but the spending timeline keeps the risk-reward balance from becoming one-sided. NGL units are up 63.7% year to date, reflecting stronger investor sentiment. The stock currently carries a Zacks Rank #3 (Hold), supporting a measured near-term stance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
NGL also has a Growth Score of A, VGM Score of A and Value Score of B, while its Momentum Score of D is weaker. Since the Style Scores complement the Zacks Rank, the current combination favors monitoring execution rather than relying on growth alone.
View the Zacks #1 Rank List
Image: Bigstock
NGL Raises 2027 EBITDA Guidance on Water Growth, LEX II
Key Takeaways
NGL Energy Partners LP (NGL - Free Report) raised fiscal 2027 adjusted EBITDA guidance to $725-$735 million from $715-$725 million after a strong fiscal first quarter led by Water Solutions. Record disposal volumes and contracted infrastructure growth strengthened the near-term earnings picture.
The next test is whether that momentum extends into fiscal 2028. LEX II, heavy growth spending and greater dependence on water make execution and customer activity central to the outlook.
NGL's Water Volumes Powered the Q1 Beat
Fiscal first-quarter adjusted earnings of 17 cents per unit topped the Zacks Consensus Estimate of 11 cents. Revenues surged 59.1% year over year to $990 million, while physical water disposal volumes reached a record 3.32 million barrels per day.
Water Solutions adjusted EBITDA increased 25.9% to $179.9 million from $142.9 million. Consolidated adjusted EBITDA from continuing operations rose 29.3% to $186.2 million, supported by higher contracted producer volumes and pipeline revenues.
NGL's Raised Guidance Extends the Earnings Story
The new $725-$735 million fiscal 2027 adjusted EBITDA range implies roughly 10% growth from fiscal 2026. Management raised the outlook by $10 million at both ends and expects Water Solutions to remain the main driver.
Producer commitments support that view. The 500,000 barrels per day signed in fiscal 2026 are flowing into fiscal 2027 results, while NGL added more than 200,000 barrels per day of commitments during the first quarter.
NGL's LEX II Adds Contracted Water Capacity
The LEX II Extension will expand the LEX Pipeline System to 81 miles and provide about 560,000 barrels per day of produced-water transportation capacity. A long-term volume commitment contract underwrites the project, which is expected in service by the end of calendar 2026.
The buildout fits a broader Permian water-infrastructure theme. Texas Pacific Land Corporation (TPL - Free Report) provides sourcing, gathering, treatment, recycling and disposal services across the basin. Select Water Solutions, Inc. (WTTR - Free Report) closed its Pilot Water Solutions acquisition on Nov. 2, 2026, expanding its Delaware Basin water-midstream position.
NGL's Growth Spending Pushes Returns Into 2028
Fiscal 2027 growth capital expenditures are expected to exceed $200 million, with spending concentrated in the first half. Much of the related EBITDA is expected in fiscal 2028, making project completion and customer-volume ramp-up important to the next leg of growth.
First-quarter operating cash flow was about $77 million versus $108.8 million of capital expenditures. NGL had roughly $203.6 million of liquidity at June 30, 2026, keeping capital discipline important while expansion spending remains elevated.
NGL's Guidance Still Faces Execution Risks
Water Solutions generated about $603 million of NGL's roughly $660 million in fiscal 2026 adjusted EBITDA from continuing operations. That concentration increases exposure to weaker Delaware Basin producer activity, even with long-term contracts providing some protection.
Restrictions tied to underground injection, seismic activity or tighter permitting could limit disposal options, raise transportation or treatment costs, or slow capacity additions. Project delays could also push returns from current investment further out.
NGL's Scores Support Growth but Flag Momentum
NGL's raised guidance, record water volumes and contracted LEX II expansion support the growth narrative, but the spending timeline keeps the risk-reward balance from becoming one-sided. NGL units are up 63.7% year to date, reflecting stronger investor sentiment. The stock currently carries a Zacks Rank #3 (Hold), supporting a measured near-term stance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NGL also has a Growth Score of A, VGM Score of A and Value Score of B, while its Momentum Score of D is weaker. Since the Style Scores complement the Zacks Rank, the current combination favors monitoring execution rather than relying on growth alone.