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EQM Midstream Partners (EQM) Provides 2020 Capex Guidance

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EQM Midstream Partners, LP EQM recently released 2020 total growth capital budget in the range of $1.2-$1.3 billion compared with projected capex of $1.7 billion for 2019. The company expects its ongoing maintenance capital expenditure to be around $55 million.

The company also provided 2020 forecast of adjusted EBITDA within $1.36-$1.41 billion compared with 2019 estimated range of $1.33-$1.35 billion. Net income attributable to the partnership for 2020 is estimated in the band of $1.05-$1.10 billion, much higher than 2019 expected range of $650-$670 million.

The partnership’s capital contribution to the Mountain Valley Pipeline (MVP) project for 2020 is estimated in the range of $650-$700 million. The 303-mile natural gas pipeline system will connect the prolific Marcellus and Utica shales to markets in the U.S. Mid- and South Atlantic regions. The 2-billion cubic feet per day pipeline’s entire capacity has been fully subscribed under 20-year contracts. The project is expected to come online by 2020-end.

EQM Midstream’s Gathering capital expenditure for 2020 is estimated in the $430-$460 million range. It includes around $60 million for its 60% stake in the Eureka Midstream Holdings. Notably, the partnership allocated 2020 capital budget of $100-$120 million for transmission operations. Of the total amount, around $50 million will be directed toward the MVP joint venture for the Southgate project. 

Markedly, the partnership expects to maintain quarterly distribution of $1.16 per common unit until the MVP project comes online. Moreover, Equitrans Midstream Corporation ETRN — which owns the majority stake in EQM Midstream — intends to maintain quarterly dividend of 45 cents per share during the same time frame.

Price Performance

EQM Midstream has lost 41.3% year to date against the 9% collective rise of the stocks belonging to the industry.

Zacks Rank & Stocks to Consider

Currently, EQM Midstream carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector include Antero Midstream Corporation AM and Frank's International N.V. FI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Antero Midstream’s bottom line for the current quarter is expected to skyrocket 130% year over year.

Frank's International’s bottom line for 2019 is expected to rise 23.8% year over year.

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Antero Midstrm (AM) : Free Stock Analysis Report
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Equitrans Midstream Corporation (ETRN) : Free Stock Analysis Report
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