Core Viewpoint - UGI shares have shown strong performance, increasing 29.3% year-to-date, outperforming the Zacks Utilities sector and the Zacks Utility - Gas Distribution industry [1][3]. Financial Performance - UGI has consistently exceeded earnings expectations, reporting an EPS of $2.21 against a consensus estimate of $1.8 in its last earnings report [2]. - For the current fiscal year, UGI is projected to achieve earnings of $3.11 per share on revenues of $7.81 billion, reflecting a 1.63% increase in EPS and an 8.36% increase in revenues [3]. - The next fiscal year forecasts an EPS of $3.14 on revenues of $8.74 billion, indicating a year-over-year change of 0.86% in EPS and 11.82% in revenues [3]. Valuation Metrics - UGI's current valuation metrics show it trading at 11.7X current fiscal year EPS estimates, below the peer industry average of 16.6X [7]. - On a trailing cash flow basis, UGI trades at 5.6X compared to the peer group's average of 8.2X [7]. - The stock has a PEG ratio of 2.26, which does not place it among the top value stocks [7]. Style Scores and Zacks Rank - UGI has a Value Score of A, a Growth Score of B, and a Momentum Score of F, resulting in a combined VGM Score of A [6]. - The stock holds a Zacks Rank of 2 (Buy), supported by rising earnings estimates, indicating potential for further gains [8].

Core Viewpoint - The article emphasizes the importance of value investing and highlights specific stocks, particularly Southwest Gas (SWX) and UGI, as potential undervalued opportunities based on various financial metrics [2][8]. Company Analysis: Southwest Gas (SWX) - SWX has a Zacks Rank of 2 (Buy) and an A grade in the Value category, indicating strong potential as a value stock [3]. - The PEG ratio for SWX is 1.92, which is lower than the industry average of 2.11, suggesting it may be undervalued relative to its expected earnings growth [4]. - SWX's P/S ratio is 1.07, compared to the industry's average of 1.6, further indicating potential undervaluation [5]. - The P/CF ratio for SWX is 7.70, which is attractive against the industry's average of 8.51, reinforcing the notion of SWX being undervalued [6]. Company Analysis: UGI - UGI also holds a Zacks Rank of 2 (Buy) with an A Value Score, making it another attractive option for value investors [7]. - UGI's forward earnings multiple is 11.54, significantly lower than the industry's P/E of 15.13, indicating potential undervaluation [7]. - The PEG ratio for UGI is 2.22, which is higher than SWX but still competitive against the industry average [7]. - UGI's P/B ratio is 1.54, compared to the industry's 1.18, suggesting it may be trading at a premium but still within a reasonable range [8].

Core Viewpoint - Wall Street is experiencing volatility due to uncertainty surrounding the new U.S. administration's economic tariffs, prompting investors to seek stability through dividend investing [1][2]. Investment Strategy - Dividend investing is highlighted as a strategy that offers income and stability, especially in a rocky market, despite not providing dramatic price appreciation [2]. - Stocks with a history of dividend growth are recommended for building a healthy portfolio with potential for capital appreciation [3][4]. Selected Dividend Growth Stocks - Four dividend growth stocks are identified as compelling picks: - NetEase Inc. (NTES) with an expected earnings growth rate of 10.6% and a Zacks Rank 1 [10]. - Fox Corporation (FOX) with an expected earnings growth rate of 32.4% and a Zacks Rank 1 [11]. - Qifu Technology Inc. (QFIN) with an expected earnings growth rate of 22.6% and a Zacks Rank 2 [12][13]. - UGI Corporation (UGI) with a positive earnings estimate revision and a Zacks Rank 2 [14][15]. Stock Selection Criteria - Stocks selected for dividend growth should have: - 5-Year Historical Dividend Growth greater than zero [6]. - 5-Year Historical Sales Growth greater than zero [7]. - 5-Year Historical EPS Growth greater than zero [7]. - Next 3-5 Year EPS Growth Rate greater than zero [7]. - Price/Cash Flow less than M-Industry [8]. - 52-Week Price Change greater than S&P 500 [8]. - Top Zacks Rank of 1 or 2 [8]. - Growth Score of B or better [9]. Company Fundamentals - Companies with strong fundamentals are characterized by sustainable business models, profitability, rising cash flows, good liquidity, and strong balance sheets, making them promising long-term investments [5].

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores are indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the short term [2][3] - Stocks are rated from A to F, with A indicating the highest potential for outperformance [3] Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - The Growth Style Score assesses a company's future earnings, sales, and cash flow to find stocks with sustainable growth potential [4] Momentum Score - The Momentum Style Score evaluates price trends and earnings estimate changes to identify favorable buying opportunities for high-momentum stocks [5] VGM Score - The VGM Score combines Value, Growth, and Momentum Scores, providing a comprehensive indicator for stock selection [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] Stock Selection Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize potential returns [9][10] Company Spotlight: UGI Corporation - UGI Corporation is a holding company involved in the distribution and marketing of energy products, serving over 2.6 million customers [11] - UGI holds a Zacks Rank of 2 (Buy) and has a VGM Score of A, indicating strong investment potential [12] - The company has a forward P/E ratio of 11.45 and has seen upward revisions in earnings estimates, with a Zacks Consensus Estimate of $3.11 per share for fiscal 2025 [12][13]

Core Insights - The article emphasizes the importance of fundamental analysis in identifying undervalued assets that offer a favorable risk/reward profile [1] - It highlights the use of options strategies, such as covered calls and writing puts, as effective investment techniques for managing positions [1] Investment Strategy - The investment approach focuses on individual issues and asset classes that are currently out of favor, suggesting a contrarian strategy [1] - The analyst has over 20 years of investment experience, indicating a deep understanding of market dynamics and investment opportunities [1] Educational Background - The analyst holds an MBA in Finance from NYU Stern and an undergraduate degree in Computer Science, showcasing a strong educational foundation that supports their investment analysis [1]

Company Performance - UGI shares have increased by 12.8% over the past month and reached a new 52-week high of $35.41 [1] - Year-to-date, UGI has gained 23.7%, outperforming the Zacks Utilities sector's 6.4% and the Zacks Utility - Gas Distribution industry's -0.5% return [1] Earnings and Revenue - UGI has consistently exceeded earnings consensus estimates, reporting EPS of $2.21 against a consensus of $1.8 in its last earnings report [2] - For the current fiscal year, UGI is projected to earn $3.06 per share on revenues of $7.79 billion, reflecting a 0% change in EPS and a 7.98% increase in revenues [3] - The next fiscal year forecasts earnings of $3.12 per share on $8.59 billion in revenues, indicating a year-over-year change of 1.96% in EPS and 10.34% in revenues [3] Valuation Metrics - UGI's current trading metrics show a P/E ratio of 11.4X for the current fiscal year, below the peer industry average of 16.2X [7] - The stock trades at a trailing cash flow basis of 5.3X compared to the peer group's average of 8.5X, with a PEG ratio of 2.19 [7] Zacks Rank and Style Scores - UGI holds a Zacks Rank of 2 (Buy) due to rising earnings estimates, making it a suitable choice for investors [8] - The company has a Value Score of A, Growth Score of C, and Momentum Score of D, resulting in a VGM Score of B [6] Industry Comparison - The Utility - Gas Distribution industry is performing well, ranking in the top 14% of all industries, providing favorable conditions for UGI and its peers [11] - Southwest Gas Corporation (SWX), a competitor, has a Zacks Rank of 1 (Strong Buy) and has shown strong earnings performance, indicating a competitive landscape [9][10]

Core Insights - UGI Corporation reported strong second-quarter fiscal 2025 operating earnings of $2.21 per share, exceeding the Zacks Consensus Estimate of $1.80 by 22.8% and up from $1.97 in the same quarter last year [1] - Total revenues for the quarter were $2.67 billion, slightly missing the Zacks Consensus Estimate of $2.70 billion by 1.1%, but representing an 8.1% increase from $2.47 billion in the prior year [2] Financial Performance - UGI's GAAP earnings per share for the second quarter were $2.19, down from $2.30 in the year-ago quarter [1] - Earnings before interest expense and income tax (EBIT) for the quarter were $696 million, a decrease of 4.5% from $729 million in the previous year [4] Segment Performance - AmeriGas Propane reported EBIT of $154 million, an increase of 11.6% year-over-year [5] - UGI International's EBIT was $143 million, up 9.2% from the previous year [5] - Midstream & Marketing segment reported EBIT of $154 million, a slight increase of 0.7% year-over-year [5] - UGI Utilities achieved EBIT of $241 million, reflecting a 6.6% increase from the prior year [5] Investment and Growth - UGI invested $160 million in the second quarter, with 79% allocated to natural gas [3] - The company added over 6,600 residential heating and commercial customers year-to-date [3] - UGI completed the construction of the Manning LNG facility, doubling its capacity to 20,000 dekatherms per day [3] Guidance and Outlook - UGI raised its fiscal 2025 adjusted earnings guidance to a range of $3-$3.15 per share, up from the previous range of $2.75-$3.05, with the Zacks Consensus Estimate at $3.06 per share [6] - The increase in guidance is attributed to colder-than-normal weather, operational improvements at AmeriGas, and minimal impact from facility damage at UGI International [6] Market Position - UGI currently holds a Zacks Rank 2 (Buy), indicating a favorable outlook in the market [7]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 1-11071 UGI CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction ...

Financial Data and Key Metrics Changes - UGI reported a 12% year-over-year increase in adjusted diluted EPS for the fiscal second quarter, achieving the highest adjusted diluted EPS in the company's history [5] - The fiscal 2025 guidance range for adjusted diluted EPS has been increased to $3.00 to $3.15, driven by favorable weather conditions and operational improvements [8][10] - The balance sheet showed $1,900,000,000 in available liquidity and a leverage ratio of 3.8 times at the end of the quarter [5][18] Business Line Data and Key Metrics Changes - The Utility segment's EBIT was $241,000,000, up $15,000,000 year-over-year, primarily due to colder weather [13] - Midstream and Marketing reported EBIT of $154,000,000, comparable to the prior year, with total margin increasing by $2,000,000 [14] - AmeriGas experienced a $16,000,000 increase in EBIT, largely due to colder weather, although adjusted diluted EPS declined by $0.06 due to higher income tax expenses [12][17] Market Data and Key Metrics Changes - Regional natural gas demand continues to show robust growth, with the LNG infrastructure operating at peak capacity during colder weather [6] - UGI International's LPG volumes declined by 4%, but operational efficiencies led to a $12,000,000 increase in EBIT [15][16] Company Strategy and Development Direction - The company is focusing on operational excellence and strategic infrastructure investments, particularly in the regulated utility business [19] - AmeriGas is implementing business process improvements to enhance customer retention and operational efficiency [20] - The company is well-positioned to capitalize on the growing demand for natural gas in the Appalachia region [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying strength of the business and the ability to execute strategic priorities in the second half of the year [10] - The company is optimistic about improving AmeriGas operations and enhancing customer service ahead of the next winter season [29][30] Other Important Information - The company deployed $160,000,000 in capital investment during the quarter, primarily in natural gas businesses [7] - Free cash flow for the year to date was approximately $490,000,000, up 55% year-over-year [17] Q&A Session Summary Question: Can you discuss the learnings from AmeriGas and refinancing plans? - Management highlighted the focus on improving AmeriGas business processes and targeting operational efficiencies, with ongoing efforts to refinance the 2026 maturities [24][34] Question: What is UGI's positioning regarding Appalachian natural gas demand? - Management noted ongoing discussions with potential generators and data centers, emphasizing the company's strategic location and capital allocation towards natural gas [40][41] Question: Can you quantify the incremental margin or EBITDA from AmeriGas for fiscal 2026? - Management refrained from providing specific numbers but emphasized the need to strengthen business processes and focus on high-margin customers [47][48] Question: What are the fiscal second half drivers? - Management explained that colder weather in the first half led to a strong performance, but some capital and operational expenses were pushed to the second half, affecting earnings timing [51][52]

Financial Data and Key Metrics Changes - UGI reported a 12% year-over-year increase in adjusted diluted EPS for the fiscal second quarter, achieving the highest adjusted diluted EPS in the company's history [5] - The fiscal 2025 guidance range for adjusted diluted EPS has been increased to $3.00 to $3.15, driven by favorable weather conditions and operational improvements [8][11] - The balance sheet showed $1,900,000,000 in available liquidity and a leverage ratio of 3.8 times at the end of the quarter [5][19] Business Line Data and Key Metrics Changes - The Utility segment reported EBIT of $241,000,000, up $15,000,000 year-over-year, primarily due to colder weather [14] - Midstream and Marketing segment EBIT was $154,000,000, comparable to the prior year, with total margin increasing by $2,000,000 [15] - AmeriGas reported EBIT of $154,000,000, an increase of $16,000,000 year-over-year, driven by higher LPG volumes due to colder weather [18] Market Data and Key Metrics Changes - Regional natural gas demand continues to show robust growth, particularly in response to colder weather patterns [6] - UGI International experienced a 4% decline in LPG volumes, impacted by structural conservation and customer conversions from LPG to natural gas [16] Company Strategy and Development Direction - The company is focusing on operational excellence and strategic infrastructure investments, particularly in the regulated utility business [21] - AmeriGas is implementing process improvements to enhance customer retention and operational efficiency [21] - The company is well-positioned to leverage its infrastructure for growth in natural gas demand, particularly in the Appalachian region [39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying strength of the business and the ability to execute strategic priorities in the second half of the fiscal year [11] - The company is optimistic about improving AmeriGas operations and enhancing customer service ahead of the next winter season [30] Other Important Information - The company deployed $160,000,000 in capital investment during the quarter, primarily in natural gas businesses [7] - Free cash flow for the year to date was approximately $490,000,000, up 55% year-over-year [19] Q&A Session Summary Question: Can you discuss the learnings from AmeriGas this winter and targets for the upcoming fiscal year? - Management highlighted the focus on improving business processes and operational efficiency, with several key projects underway to enhance service and reduce costs [25][26] Question: Update on refinancing the 2026 maturities? - Management confirmed that objectives remain unchanged, with a focus on addressing the $664,000,000 due in late August [32] Question: Thoughts on UGI's positioning regarding Appalachian natural gas demand? - Management noted ongoing discussions with potential generators and data centers, emphasizing the company's strategic location and infrastructure [38] Question: Quantification of incremental margin or EBITDA from AmeriGas for fiscal 2026? - Management refrained from providing specific numbers but emphasized the importance of strengthening business processes and focusing on high-margin customers [45][46] Question: Comments on fiscal second half drivers and implied net loss? - Management explained that colder weather in the first half led to a shift in capital and operational expenditures to the second half, impacting earnings timing [49][50]