Nucor earnings beat by $0.08, revenue fell short of estimates
On Monday, BofA Securities announced the initiation of coverage on DT Midstream (NYSE:DTM) with a Buy rating and a price target of $110.00. The BofA Securities analyst praised the natural gas midstream company for its impressive asset portfolio and ambitious expansion plans, which include $2.3 billion in potential capital projects. The company has demonstrated strong performance, with InvestingPro data showing a remarkable 69.43% return over the past year and consistent dividend growth for four consecutive years.
DT Midstream, which became an independent entity following its spinoff from DTE Energy (NYSE:DTE) in 2021, is expected to significantly boost its EBITDA to $1.5 billion by 2029. This represents an approximate 7% compound annual growth rate (CAGR) from 2025 to 2029, a figure that surpasses consensus estimates and is comparable to the growth rate of its industry peer, Williams Companies (NYSE:WMB). Currently, the company generates $698 million in EBITDA with a healthy gross profit margin of 77.57%, according to InvestingPro data.
The analyst highlighted that DT Midstream’s current trading level is approximately one times below that of Williams Companies’ enterprise value to projected 2027 EBITDA, suggesting that DT Midstream is undervalued. The BofA Securities coverage points to a robust project backlog that is anticipated to continue through 2029.
Moreover, BofA Securities forecasts that DT Midstream will maintain a steady growth rate of 1.0% per year through 2040, aligning with their long-term forecast for the U.S. gas market. The price objective of $110.00 was determined using an 8.6% cost of equity, according to the analyst’s valuation model. This new coverage and price target provide investors with a fresh perspective on DT Midstream’s market potential and financial outlook.
In other recent news, DT Midstream reported its fourth-quarter 2024 earnings, revealing a 5% increase in adjusted EBITDA to $969 million and a slight miss on EPS, which came in at $0.94 compared to the forecasted $0.95. The company also announced a 12% increase in its quarterly dividend to $0.82 per share. UBS initiated coverage of DT Midstream with a Buy rating and a $102 price target, citing upcoming power deals and potential rating agency upgrades as growth catalysts. Meanwhile, Mizuho (NYSE:MFG) Securities raised its price target on DT Midstream to $105, maintaining a Neutral rating, following the company’s update on its $2.3 billion capital expenditure backlog. This backlog includes projects such as the LEAP and Blue Union developments, which could boost adjusted EBITDA by approximately $300 million. DT Midstream’s acquisition of a Midwest Pipeline has also expanded its project backlog, potentially adding $350 million to cumulative EBITDA, according to UBS. The company provided guidance for 2025, projecting an 18% growth in adjusted EBITDA to a range of $1,095-$1,155 million. Analysts have noted that DT Midstream’s solid operational infrastructure and strategic initiatives position it well for continued growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.