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On Monday, Stifel analysts adjusted their stance on Global Partners L.P. (NYSE:GLP), downgrading the stock from Buy to Hold, while increasing the price target to $56.00, up from $54.00. The revision followed the company’s fourth-quarter earnings for 2024, which did not meet the firm’s expectations. The lower-than-anticipated results were attributed to reduced fuel margins in the Global’s Distribution and Station Operations (GDSO). According to InvestingPro data, the stock is trading near its 52-week high of $60, with a significant 40.78% price return over the past six months, suggesting the market remains optimistic despite the earnings miss.
Global Partners is currently assessing the impact of potential Canadian tariffs, but the company is confident in its ability to adapt due to its extensive network, which allows flexibility in securing supply from various locations. In addition to this, the management of Global Partners has been actively involved in acquisitions over the past few years and plans to continue exploring mergers and acquisitions (M&A) that are perceived as beneficial to the partnership.
Despite these activities, Stifel’s analysts have expressed a belief that the stock is now fairly valued, prompting the downgrade. However, they remain positive about the company’s strategic approach to M&A and expect the core business to generate stable cash flows over time.
The updated price target of $56.00 reflects a modest increase from the previous target, suggesting a slight improvement in the valuation of Global Partners’ shares. The company’s ongoing evaluation of market conditions and strategic acquisitions are key factors that could influence its financial performance and stock valuation moving forward.
In other recent news, Global Partners LP reported a decline in its Q4 2024 adjusted EBITDA to $97.8 million, a drop from $112.1 million in the previous year. The company’s adjusted distributable cash flow also decreased to $46.1 million from $58.8 million in Q4 2023. Despite these setbacks, the company noted improvements in its GDSO and wholesale segment margins over the full year. Strategic investments totaling $528 million were made in 2024, underscoring the company’s commitment to growth. The company’s expansion included the integration of 30 new terminals across various regions, significantly increasing storage capacity. CEO Eric Slifka emphasized the company’s strong financial and operational position as it enters 2025, with plans for further growth and acquisitions. Global Partners is also preparing for potential tariffs on oil and gas imports, which could impact supply chains. The firm remains focused on leveraging its flexible sourcing capabilities to mitigate these risks.
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