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Crestwood (CEQP) Boosts Public Trading Float, Ups Income Guidance

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Crestwood Equity Partners LP CEQP recently announced several strategic transactions, which will likely boost distributable cash flow per unit, free cash flow and amplify the credit profile. Moreover, the partnership provided an updated 2021 guidance.

Through a series of deals, Crestwood acquired 11.5 million common units and the general partner interest from Crestwood Holdings LLC for $268 million. Another deal with First Reserve enabled the private equity firm to exit Crestwood. The move transitions Crestwood, which will retire 11.5 million First Reserve-held stocks, to a publicly-elected board of directors. Moreover, it is expected to increase Crestwood’s public trading float by almost 12%.

The retirement of Crestwood Stocks is expected to boost its per unit figures. Also, these moves are expected to result in annual common distribution savings of around $29 million. Furthermore, the board of directors authorized a $175-million common and preferred unit buyback program, through Dec 31, 2022. Completion of these transactions will leave Crestwood with around 62.8 million outstanding common units.

The partnership revised 2021 adjusted EBITDA to the $575-$625 million level from the previous guidance of $550-$610 million. Net income is now expected at $100-$150 million. Markedly, the partnership estimates free cash flow after paying distributions within $130-$180 million, higher than the previous estimate of $90-$160 million.

Price Performance

Crestwood stock has surged 95.9% in the past six months compared with the industry’s 39.5% growth.

Zacks Rank & Stocks to Consider

The partnership currently has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include DCP Midstream, LP DCP, Equinor ASA EQNR and Royal Dutch Shell plc RDS.A, each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DCP Midstream’s bottom line for 2021 is expected to rise 45.3% year over year.

Equinor’s bottom line for first-quarter 2021 is expected to rise 111.8% year over year.

Shell’s bottom line for 2021 is expected to increase 200% year over year.

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Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report

Crestwood Equity Partners LP (CEQP) : Free Stock Analysis Report

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