For those looking to find strong Oils-Energy stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Antero Midstream Corporation (AM) been one of those stocks this year? By taking a look at the stock's year-to-date performance in comparison to its Oils-Energy peers, we might be able to answer that question.Antero Midstream Corporation is one of 251 individual stocks in the Oils-Energy sector. Collectively, these companies sit at #10 in the Zacks Sector Rank. The Z ...

Antero Midstream Corporation (AM) has witnessed upward earnings estimate revisions for 2024 in the past 60 days.The company, currently carrying a Zacks Rank #3 (Hold), beat the Zacks Consensus Estimate for earnings in the trailing four quarters, delivering a surprise of 11.1% on average.Sustained Earnings GrowthAntero Midstream has shown consistent earnings growth, with an 18% compound annual growth rate in EBITDA from 2014 to 2023, and is guiding to a mid-point of $1.04 billion of EBITDA for 2024. The comp ...

onurdongel Finally, after several years of the same dividend, Antero Midstream (NYSE:AM) management "let the cat out of the bag". It is finally time to put a dividend increase up for discussion in the future. Management still wants to get that debt ratio below 3.0. That is extremely conservative for a midstream company. However, captive midstream companies are typically run conservatively. In the meantime, management forecasts steady growth as parent company Antero Resources (AR) waits for more export capac ...

A month has gone by since the last earnings report for Antero Midstream Corporation (AM) . Shares have added about 8% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Antero Midstream Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Antero Midstream Q4 Ear ...

Company Overview - Antero Midstream (AM) is a midstream company that owns a system of low-pressure and high-pressure gathering pipelines primarily serving Antero Resources (AR) [3] - AM also has a 50% stake in a joint venture with MarkWest for processing and fractionation assets in the Marcellus and Utica regions, along with a freshwater delivery business [3] - The company's contracts are fee-based or service-based with inflation escalators, making it largely dependent on natural gas volumes from AR, which owns 29% of AM [3] Q4 Results - AM's Q4 results are closely tied to AR's drilling activity, with AR's Q4 production rising 6% year-over-year [4] - AM's low-pressure gathering volumes increased by 10% to 3,377 MMcf/d, while high-pressure gathering rose 10% to 3,047 MMcf/d [4][6] - The acquisition of Crestwood in Q4 2022 contributed to the increase in low-pressure volumes [4] Financial Performance - AM reported a 10% increase in adjusted EBITDA to $254 million and free cash flow surged to $156.4 million from $115.7 million a year ago [6] - The company ended the quarter with leverage of 3.3x, down from 3.4x in the previous quarter, and aims to reach 3.0x leverage by the end of 2024 [6] - AM forecasts full-year adjusted EBITDA of $1.02-1.06 billion, a 5% increase at the midpoint, with CapEx projected to decrease by 14% to $150-170 million [6] Valuation - AM trades at 8.1x the 2024 EBITDA consensus of $1.06 billion and has a free cash flow yield of about 12% based on projections [7] - The stock has a dividend yield of approximately 7.3% and is considered to have one of the cheaper valuations in the sector [7] - Valuation estimates suggest that an 8-9x multiple on 2025 EBITDA could value the stock between $13.50-15.50 after accounting for debt reductions [7] Future Outlook - AM is expected to benefit from rebate roll-offs and inflation escalators in contracts in 2024, with free cash flow expected to increase due to lower interest expenses and reduced CapEx [6][8] - The company plans to maintain its annualized dividend at 90 cents and has authorized a $500 million share repurchase plan [6] - While a distribution increase is not anticipated in the near term, there is potential for such an increase in 2025 after reaching the leverage target [8]

Core Viewpoint - Antero Midstream Corporation reported strong fourth-quarter 2023 results, with adjusted earnings per share of 24 cents, exceeding estimates and improving from the previous year's 20 cents. Total revenues of $260 million also surpassed expectations and increased from $242 million year-over-year, driven by higher compression and low-pressure gathering volumes [1]. Operational Performance - Average daily compression volumes reached 3,343 million cubic feet (MMcf/d), up from 2,945 MMcf/d in the prior year and exceeding estimates [2]. - High-pressure gathering volumes increased to 3,047 MMcf/d from 2,762 MMcf/d year-over-year, also surpassing estimates [2]. - Low-pressure gathering volumes averaged 3,377 MMcf/d, up from 3,070 MMcf/d in the fourth quarter of 2022, exceeding estimates [2]. - Freshwater delivery volumes were 94 MBbls/d, down approximately 15% from 111 MBbls/d in the prior year, while the average freshwater distribution fee increased to $4.22 from $4.09 [3]. Operating Expenses - Direct operating expenses rose to $50.8 million from $48.3 million year-over-year [4]. - Total operating expenses increased to $104.5 million from $97.4 million in the corresponding period of 2022 [4]. Balance Sheet - As of December 31, the company had cash and cash equivalents of $66,000 and long-term debt of $3,213.2 million [5]. Outlook - For 2024, Antero Midstream expects adjusted EBITDA in the range of $1,020-$1,060 million, indicating a 5% increase from 2023 at the midpoint. Free Cash Flows after dividends are projected to be between $235-$275 million, with a capital budget of $150-$170 million, reflecting a 14% decrease from 2023 at the midpoint [6].

Core Viewpoint - Antero Midstream is positioned as a high-yield investment opportunity with a current yield of 7.3%, supported by stable long-term contracts and a strong partnership with Antero Resources, indicating potential for future dividend growth and robust financial performance [1][26]. Financial Performance - In 2023, Antero Midstream achieved a record $981 million in EBITDA and an 18% return on invested capital, demonstrating operational expertise and sustained value creation for shareholders [7]. - The fourth quarter of 2023 saw Antero Midstream report $254 million in EBITDA, a 10% increase year-over-year, and generated $156 million in free cash flow before dividends [9][12]. - The company anticipates $1.1 billion in EBITDA for 2024, reflecting solid performance driven by a maintenance capital program at Antero Resources [12][20]. Strategic Positioning - Antero Midstream benefits from a close partnership with Antero Resources, which holds a 29% ownership interest in the company, allowing for optimized operations and capital allocation strategies [7][26]. - The company owns over 400 miles of low-pressure pipelines and 230 miles of high-pressure pipelines, supporting Antero Resources' operations and ensuring minimal competition [7][16]. Future Growth Prospects - Antero Midstream plans to invest between $150 and $170 million in capital expenditures for 2024, focusing on maximizing value from its core assets in the Marcellus liquids-rich midstream corridor [12][20]. - The company expects to generate between $670 and $710 million in free cash flow in 2024, with a dividend coverage ratio of 159%, indicating strong financial health [18][19]. Valuation - Antero Midstream is trading at a blended P/OCF ratio of 7.6x, below its normalized long-term multiple of 10.4x, suggesting potential for significant price appreciation [25]. - Analysts project that the company could reach a fair value of over $18 per share, representing a 45% upside from its current price [25]. Dividend and Shareholder Returns - The company plans to maintain a stable dividend of $0.90 per share in 2024, with excess cash flow directed towards debt reduction and a $500 million share repurchase program [18][19]. - This buyback program could represent 8.4% of Antero Midstream's market cap, enhancing shareholder returns [18].

Fourth Quarter 2023 Earnings Presentation February 15, 2024 Antero Midstream (NYSE: AM) Legal Disclaimer Forward-Looking Statements: This presentation includes "forward-looking statements" within the meaning of federal securities laws. Such forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond Antero Midstream Corporation’s (“Antero Midstream” or “AM”) control. All statements, other than historical facts included in this presentation, are forward-looking sta ...

Financial Data and Key Metrics Changes - In 2023, Antero Midstream generated a record $981 million of EBITDA, reflecting an 18% return on invested capital, with a compound annual growth rate of 18% since its IPO in 2014 [4][5] - For Q4 2023, the company achieved $254 million of EBITDA, a 10% year-over-year increase, and full-year EBITDA was $989 million, a 12% increase compared to 2022 [12][13] - Free cash flow before dividends for Q4 2023 was $156 million, and after dividends, it was $48 million, with full-year free cash flow records of $587 million before and $155 million after dividends [12][13] Business Line Data and Key Metrics Changes - Low pressure gathering and compression volumes increased by 10% and 14% respectively in Q4 2023 compared to the previous year, setting company records [12] - The capital expenditures for 2023 were $185 million, a 30% reduction compared to 2022, with a forecasted capital budget for 2024 of $150 million to $170 million, representing a 14% decrease from 2023 [6][14] Market Data and Key Metrics Changes - Propane inventories have declined significantly, leading to a bullish sentiment in pricing, with Mont Belvieu propane prices increasing from 43% of WTI last fall to 57% today [10] - Approximately 50% of Antero Resources' 2023 revenues were derived from liquids, indicating a strong market position due to pricing improvements [10] Company Strategy and Development Direction - Antero Midstream plans to maintain a stable dividend of $0.90 per share, representing a 7% yield, while focusing on debt reduction and opportunistic share repurchases under a $500 million program [16][18] - The company aims to achieve a three times leverage target in 2024, with a balanced capital allocation strategy to maximize shareholder value [18][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational leverage of their assets, forecasting over $1 billion of EBITDA for 2024, driven by flat to low single-digit throughput growth and the expiration of fee rebates [14][19] - Despite a volatile commodity price environment, Antero Midstream remains on track to achieve its five-year targets from 2023 through 2027, with a backlog of $900 million to $1 billion in organic projects [17][19] Other Important Information - The company reported a decline in leverage to 3.3 times at year-end 2023, with plans to further reduce debt using free cash flow [13][15] - Antero Midstream's capital budget flexibility allows for adjustments based on Antero Resources' development plans, with a focus on the Marcellus liquids-rich midstream corridor [6][8] Q&A Session Summary Question: Volume trajectory expectations for AR's activity into 2024 - Management indicated that AR's production is expected to be flat, with maintenance capital plans in place, and noted the impact of fee rebates and CPI adjustments on EBITDA outlook [23] Question: Timing of share buybacks - Management confirmed that share buybacks would commence once leverage hits three times, with a preference for open market repurchases [25][26] Question: Flexibility in cash use and potential M&A - Management stated that they evaluate all options based on return on invested capital, balancing between acquisitions, buybacks, and debt paydown [31] Question: Guidance on EBITDA and activity levels - Management clarified that the lower end of the EBITDA guidance reflects potential reductions in activity due to volatile gas prices, while maintaining a positive outlook based on AR's strong balance sheet [33] Question: Impact of gas production decline on AM - Management noted that producers focused on dry gas may face challenges, leading to a decline in production, while AR's liquids focus positions it favorably [37] Question: Update on the lawsuit and cash use - Management provided no new updates on the lawsuit but indicated that any cash received would be evaluated for optimal use [45] Question: Ultimate leverage target for AM - Management confirmed a target of three times leverage, with no immediate plans for further reductions beyond that [48] Question: Water business drivers and volume expectations - Management indicated that total water volumes are expected to decrease in 2024 due to fewer completions, despite longer lateral lengths [52]

For the quarter ended December 2023, Antero Midstream Corporation (AM) reported revenue of $260.17 million, up 7.7% over the same period last year. EPS came in at $0.24, compared to $0.20 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $249.45 million, representing a surprise of +4.30%. The company delivered an EPS surprise of +14.29%, with the consensus EPS estimate being $0.21.While investors closely watch year-over-year changes in headline numbers -- revenue and e ...