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LGCY Is Up ~400% in 2018: Can It Continue to Rise?

Kurt Gallon
LGCY Is Up ~400% in 2018: Can It Continue to Rise?

The upstream MLP, which was close to bankruptcy during 2016, has recovered significantly in recent quarters driven by debt restructuring and strong earnings growth resulting from production growth and gains in crude oil (USO) prices. At the same time, the Energy Select Sector SPDR ETF (XLE) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) are up 6.2% and 11.0% YTD, respectively. The widening of the spread between WTI Midland and WTI cash and a decline in crude oil prices from here could limit the partnership’s earnings growth target for the rest of 2018, which could further weigh on LGCY’s stock performance.