Nucor earnings beat by $0.08, revenue fell short of estimates
On Thursday, UBS analyst Manav Gupta increased the price target for DT Midstream (NYSE:DTM) shares to $115 from the previous target of $102, while reaffirming a Buy rating on the company’s stock. Currently trading at $98.44, DTM is considered overvalued according to InvestingPro analysis. The stock has shown remarkable strength with a 71% return over the past year, and three analysts have recently revised their earnings estimates upward for the upcoming period.
DT Midstream’s expected EBITDA for the first quarter of 2025 is adjusted to $280.5 million, a significant rise from the $235 million EBITDA reported in the fourth quarter of 2024. The company, which maintains an impressive 77.57% gross profit margin and generated $698 million in EBITDA over the last twelve months, continues to show strong operational performance. This increase is attributed to a combination of factors including higher volumes from the Haynesville region, contributions from three interstate pipelines recently acquired from OKE, and a seasonal upswing in natural gas demand. These gains are slightly tempered by an increase in operational expenses related to the pipelines.
The company’s pipeline segment is estimated to have generated an EBITDA of $184 million in the first quarter, up from $156 million in the previous quarter. Similarly, the gathering segment’s EBITDA is projected to be $97 million, compared to $79 million in the fourth quarter of 2024. These estimates are closely aligned with the consensus EBITDA forecast of $283 million for the same period.
DT Midstream’s strategic positioning as a pure-play natural gas midstream operator is seen as a significant advantage. The company is expected to benefit from the broader macro trend of increasing natural gas demand, which is driven by a shift from coal to gas, rising power requirements from data centers and other industries, growing industrial gas consumption, and expanding liquefied natural gas (LNG) exports.
UBS’s updated price target and continued Buy rating on DT Midstream stock underscore a confidence in the company’s ability to capitalize on these market dynamics and deliver strong financial results in the upcoming quarters. For deeper insights into DTM’s valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis, including 8 additional ProTips and detailed financial metrics in the Pro Research Report, helping investors make more informed decisions about this $9.98 billion market cap company.
In other recent news, DT Midstream reported robust financial performance for the fourth quarter and full-year 2024, with a 5% increase in adjusted EBITDA to $969 million. The company also announced a 12% rise in its quarterly dividend to $0.82 per share. Despite slightly missing the earnings per share forecast of $0.95 with an actual EPS of $0.94, the company maintains a positive outlook with an 18% growth guidance for adjusted EBITDA in 2025. Mizuho (NYSE:MFG) Securities raised DT Midstream’s price target to $105, citing an increased capital expenditure backlog of $2.3 billion, which could lead to a $300 million adjusted EBITDA increase. BofA Securities initiated coverage of DT Midstream with a Buy rating and a $110 price target, highlighting the company’s impressive asset portfolio and ambitious expansion plans. UBS also started coverage with a Buy rating and a $102 target, noting potential catalysts like power deals and growth in the Haynesville region. These developments underscore DT Midstream’s strategic initiatives and potential for continued growth.
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