Citi raised the firm’s price target on DT Midstream (DTM) to $156 from $130 and keeps a Buy rating on the shares. DT’s capital outlook update exceeded the firm’s expectations and management’s commentary was “even more constructive on two fronts,” says the analyst, who highlights that the company acknowledged growth will likely exceed a 7% compound annual rate through the end of the decade and disclosed that the opportunity backlog is “multiples” of the $3.4B capital outlook that is already about 50% sancti ...

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Strategic Performance and Market Dynamics - Achieved record 2025 adjusted EBITDA with 17% year-over-year growth, primarily driven by the strategic expansion of the high-margin Pipeline segment [5] - Successfully integrated the Midwestern pipeline acquisition within one year, shifting the business mix to 70% pipeline-based revenue to enhance cash flow stability [5] - Expanded the 5-year organic project backlog by 50% to $3.4 billion, reflecting a 'generational investment opportunity' in the Upper Midwest and Gulf Coast [5] - Attributed strong performance to a portfolio with 95% demand-based contracts and an average 8-year tenure, providing high visibility into long-term earnings [5] - Identified a structural shift in the Upper Midwest where coal retirements and data center growth could drive 5 to 8 Bcf per day of incremental gas demand [5] - Leveraged record storage withdrawals and peak pipeline throughput during winter storms as a market signal for critical capacity constraints and expansion needs [5] Growth Outlook and Investment Strategy - Projected 2026 adjusted EBITDA growth of 6% over the 2025 midpoint, supported by new organic investments and steady producer activity [5] - Anticipates growth rates exceeding long-term guidance in the late 2020s as sizable pipeline projects from the $3.4 billion backlog enter service [5] - Plans to fully fund the expanded project backlog using internal cash flows and a healthy balance sheet while maintaining investment-grade credit ratings [5] - Targeting a 2026 year-end proportional leverage of 3.5x, demonstrating a commitment to disciplined capital allocation during a heavy investment cycle [5] - Expects 2027 growth capital expenditures to exceed 2026 levels, with $430 million already committed to sanctioned projects [5] - Reached Final Investment Decision (FID) on the Viking pipeline expansion and Phase 2 of the Interstate modernization program, totaling approximately $180 million to $200 million [5] - Achieved investment-grade credit ratings from all three major agencies in 2025, lowering the long-term cost of capital for future expansions [5] Dividend Policy - Increased the quarterly dividend by 7.3%, maintaining a policy to grow distributions in line with adjusted EBITDA while keeping a coverage ratio above 2.0x [6]

Core Viewpoint - Occidental Petroleum reported quarterly earnings of $0.31 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, but down from $0.80 per share a year ago [1] Financial Performance - The earnings surprise for the quarter was +62.13%, with the company previously expected to post earnings of $0.48 per share but actually reporting $0.64, resulting in a surprise of +33.33% [2] - Revenues for the quarter were $5.42 billion, missing the Zacks Consensus Estimate by 7.81%, and down from $6.84 billion year-over-year [3] Stock Performance - Occidental shares have increased approximately 11.7% since the beginning of the year, while the S&P 500 has shown no return [4] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $4.97 billion, and for the current fiscal year, it is $0.65 on revenues of $20.58 billion [8] - The Zacks Industry Rank for Oil and Gas - Integrated - United States is in the bottom 14% of over 250 Zacks industries, suggesting potential challenges ahead [9]

Core Insights - The increasing demand for power, particularly from AI data centers, is reshaping the U.S. natural gas landscape, with infrastructure expanding nationwide to meet this demand [1][2] Group 1: Natural Gas Demand and Infrastructure - Natural gas is becoming a crucial energy source to meet the reliability needs of data centers, which renewable sources alone cannot fulfill [2] - A significant agreement has been made between Energy Transfer (ET) and Entergy Louisiana to supply gas for Meta's Hyperion data center, with ET set to provide 250,000 million British thermal units (MMBtu) per day starting February 2028 [3] - Current natural gas pipeline projects are now distributed across all major U.S. regions to support the growing utility and industrial power demand [4] Group 2: Investment Opportunities - The Alerian Energy Infrastructure ETF (ENFR) provides substantial exposure to U.S. and Canadian midstream companies focused on natural gas infrastructure, accounting for nearly 70% of its portfolio [4] - ENFR tracks the Alerian Midstream Energy Select Index (AMEI), which yields 5.5% as of January 14 [5] Group 3: Regional Developments - In the Southwest, ET is adding 2.3 billion cubic feet per day (Bcf/d) of natural gas capacity by late 2029 [8] - DT Midstream (DTM) and TC Energy (TRP) are also expanding their capacities in the Midwest by 2029 [8] - In the Northeast, companies like Williams (WMB), Enbridge (ENB), and TRP are expanding their reach, while WMB and Kinder Morgan (KMI) are increasing capacity in the Southeast from 2027 to 2029 [8] - ET is enhancing capacity in Texas to support growth in power plants and data centers, while KMI is working on a project to meet liquefied natural gas (LNG) demand next year [8]

Group 1 - DT Midstream, Inc. (NYSE:DTM) has been recognized as one of the 14 Best Up and Coming Dividend Stocks to Buy [1] - Morgan Stanley increased its price target for DT Midstream to $137 from $126 while maintaining an Underweight stance after the company reported "relatively in-line" Q3 earnings [2] - The company reported Adjusted EBITDA of $288 million for the quarter, an increase of $11 million from Q2, with improvements in the gathering segment due to stronger Haynesville volumes [3] Group 2 - Management raised its distributable cash flow guidance to a range of $800 million to $830 million, increasing the midpoint by $45 million due to lower maintenance spending, reduced interest costs, and lighter cash taxes [4] - DT Midstream plans to increase dividends by 5% to 7% annually, maintaining the third-quarter payout at $0.82 per share [4] - The company operates a comprehensive network of natural gas pipelines, storage infrastructure, gathering systems, and related facilities across interstate and intrastate markets [5]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Core Insights - The midstream/MLP earnings season for the third quarter saw mostly in-line results, with expectations for a softer quarter leading to moderated estimates [1][9] - Notable announcements included acquisitions, data center deals, and plans for dividend increases, indicating robust growth opportunities in energy infrastructure, particularly for natural gas [9] Company Summaries - **MPLX (MPLX)**: Reported in-line results with $100 million in buybacks; management targets mid-single-digit EBITDA growth and 12.5% distribution growth for the next few years [2] - **Targa Resources (TRGP)**: Adjusted EBITDA exceeded consensus; expects a 25% increase in quarterly dividend to $1.25 per share by May 2026 and at least 10% growth in Permian volumes for 2025 [3] - **DT Midstream (DTM)**: Beat-and-raise quarter with a $50 million increase in 2025 adjusted EBITDA guidance to $1.13 billion; reaffirmed 2026 adjusted EBITDA outlook [4] - **Western Midstream (WES)**: Results exceeded expectations; anticipates ending the year at the high end of 2025 adjusted EBITDA guidance [5] - **Enterprise Products Partners (EPD)**: Results fell short of consensus; increased repurchase authorization to $5 billion and raised 2025 organic growth capex guidance to ~$4.5 billion [6] - **Williams (WMB)**: Announced in-line results and increased the Socrates power project budget to $2 billion; focused on investment in Woodside's Louisiana LNG [7] - **Energy Transfer (ET)**: Results fell short of estimates; expects full-year adjusted EBITDA below guidance range but highlighted growth opportunities in natural gas and data centers [8] - **Sunoco (SUN)**: In-line quarter overshadowed by Parkland integration; expects leverage below 4x within 12 months and over $250 million in synergies [10] - **Plains All American (PAA/PAGP)**: In-line results with acquisition of remaining interest in EPIC; expects mid-teens returns and a 2026 EBITDA multiple of 10x [11] - **Kinder Morgan (KMI)**: In-line results; pursuing $10 billion in potential projects primarily around natural gas [12] - **TC Energy (TRP CN)**: In-line results; expects 6%-8% year-over-year adjusted EBITDA growth in 2026 [13] - **Enbridge (ENB CN)**: In-line results; reaffirmed 2025 guidance and sanctioned $3 billion of projects [14] - **Cheniere Energy (LNG)**: Adjusted EBITDA below consensus; raised distributable cash flow guidance midpoint by $400 million to $5 billion [15] - **ONEOK (OKE)**: Slightly above consensus results; on pace to realize $250 million in synergies in 2025 [16] - **Pembina (PPL CN)**: In-line results; narrowed 2025 guidance range and announced a 20-year agreement with Petronas [17] Outlook and Trends - Investors should watch for guidance from companies like Kinder Morgan, Pembina, and Enbridge in December for 2026 [18] - A cautious oil outlook may contribute to uncertainty around 2026, but several companies expressed constructive comments regarding growth [19] - The Alerian MLP Infrastructure Index (AMZI) and Alerian Midstream Energy Select Index (AMEI) were yielding 8.0% and 5.7%, respectively, indicating strong dividend income potential [19]

Summary of the Conference Call on North American Midstream & Renewable Energy Infrastructure Industry Overview - The report focuses on the North American midstream sector, particularly how crude oil prices, specifically WTI (West Texas Intermediate), influence midstream stocks performance [1][2]. Key Insights - A quantitative analysis was conducted to understand the historical relationship between WTI prices and individual midstream stocks, aiming to prepare investors for potential near-term oil price declines [9][10]. - The report indicates that midstream stocks exhibit negative convexity to oil prices, meaning they tend to decline more sharply when WTI prices fall than they rise when prices increase [10]. - Current market conditions show that WTI has decreased by 24% since its recent peak in January 2025, which is in the $60 price band, a scenario that correlates with higher risks for midstream stocks [10]. Investment Recommendations - The report suggests a cautious approach, recommending to consider long positions in specific midstream stocks such as TRGP (Overweight), OKE (Overweight), WBI (Equal-weight), and PAA (Equal-weight) if WTI falls below $55 per barrel [10][12][15]. - The valuation of these stocks appears inexpensive, but a more aggressive capital allocation is advised only if WTI drops to the $50-$55 range [12][15]. Market Dynamics - The report highlights that the potential for a global oil market oversupply could lead to further downside risks for oil-levered midstream equities [12]. - Despite the current lag in performance of oil-levered midstream equities during recent down days for crude oil, the long-term contracted nature of most midstream companies provides cash flow resiliency and limits funding risks [12]. Correlation Analysis - The report includes various exhibits showing the correlation between WTI prices and midstream companies over the years, indicating that correlations tend to be higher during periods of significant price movements [16][17]. - Historical data from 2014 to 2025 shows varying degrees of correlation between WTI and midstream stocks, with a notable increase in correlation during downturns [17]. Conclusion - The North American midstream sector is currently viewed as attractive, but investors are advised to remain patient and strategic in their approach, particularly in light of potential oil price corrections and the associated risks for midstream equities [8][12].

Group 1 - DT Midstream (NYSE: DTM) has been identified as a successful spinoff, although concerns about its current stock price have been raised [2] - The stock has appreciated since the last analysis, indicating positive market sentiment, but the valuation may be considered high [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] Group 2 - The analysis provided includes a comprehensive breakdown of companies in the oil and gas sector, focusing on balance sheets, competitive positions, and development prospects [1] - Membership in the Oil & Gas Value Research service offers exclusive insights and analyses not available on public platforms [1]