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Shell Midstream (SHLX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Shell Midstream (SHLX) closed the most recent trading day at $19.52, moving +1.04% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.76%. Meanwhile, the Dow gained 0.67%, and the Nasdaq, a tech-heavy index, added 0.71%.

Heading into today, shares of the master limited partnership had gained 0.68% over the past month, lagging the Oils-Energy sector's gain of 2.31% and the S&P 500's gain of 0.75% in that time.

Wall Street will be looking for positivity from SHLX as it approaches its next earnings report date. This is expected to be February 26, 2019. On that day, SHLX is projected to report earnings of $0.49 per share, which would represent year-over-year growth of 40%. Meanwhile, our latest consensus estimate is calling for revenue of $130 million, up 2.52% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for SHLX. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.49% higher. SHLX is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, SHLX is holding a Forward P/E ratio of 9.92. For comparison, its industry has an average Forward P/E of 12.11, which means SHLX is trading at a discount to the group.

It is also worth noting that SHLX currently has a PEG ratio of 3.31. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Oil and Gas - Production Pipeline - MLB was holding an average PEG ratio of 2.23 at yesterday's closing price.

The Oil and Gas - Production Pipeline - MLB industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 168, which puts it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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