Read on Twitter
MPLX 14 percent yield needs another look...
FCF is increasing and they authorized a $1 billion buyback of shares. MPLX views buybacks as preferred over cap ex. spend given units are yielding ~14% and given their 4.0x leverage which should trend lower as EBITDA ramps
FCF is increasing and they authorized a $1 billion buyback of shares. MPLX views buybacks as preferred over cap ex. spend given units are yielding ~14% and given their 4.0x leverage which should trend lower as EBITDA ramps
over the near-term. Given outlook for energy is
uncertain and current implied 6.6x buyback investment multiple it's smart. MPLX believes their assets continue to serve an important role in energy long-term and are well positioned to move with MPC through any energy transition.
uncertain and current implied 6.6x buyback investment multiple it's smart. MPLX believes their assets continue to serve an important role in energy long-term and are well positioned to move with MPC through any energy transition.
Specifically management noted the possibility to re-purpose certain assets and transport green products through their footprint. While uncertainties exist, MPLX views themselves as an energy logistics company, even as
the molecules shift. Stifel raised target to $24 recently.
the molecules shift. Stifel raised target to $24 recently.
I've seen street targets as high as $27. They are repurposing an ND refinery to bio diesel which has excellent current margins. They also can repurpose (for example) exisiting pipe for CO2 transport, hydrogen transport and renewable NG as well as traditional product.
At the end of 3Q20, MPLX had $28 million in cash, $3.4 billion bank revolving credit facility (expires July '24) and $1.5 billion there through its intercompany
loan agreement with MPC. Additionally, MPLX had $20.3 billion of debt outstanding, in line with
2Q20 levels.
loan agreement with MPC. Additionally, MPLX had $20.3 billion of debt outstanding, in line with
2Q20 levels.
Management highlighted a leverage ratio of 4.0x, in line with the prior quarter. Stifel says leverage can drop below that in 2021. 3Q20 results were well above expectations. MPLX continues to expect FY20 growth capex to be ~$900 million, guiding FY21's amount to be below that.
For its L&S
segment, MPLX noted volumes will move in tandem with MPC's refinery utilization. Currently, MPC's guidance for 4Q20 is slightly lower
than 3Q20's. MPLX believes it is on target to achieve the $200 million of operating expense reductions forecasted for FY20
segment, MPLX noted volumes will move in tandem with MPC's refinery utilization. Currently, MPC's guidance for 4Q20 is slightly lower
than 3Q20's. MPLX believes it is on target to achieve the $200 million of operating expense reductions forecasted for FY20
and expects them to be sustainable going forward.
Potential Dropdowns – Regarding midstream-centric assets held at the MPC level, MPLX indicated potential dropdowns are not high on its priority list. MPLX listed its current focus is on optimizing and reducing costs.
Potential Dropdowns – Regarding midstream-centric assets held at the MPC level, MPLX indicated potential dropdowns are not high on its priority list. MPLX listed its current focus is on optimizing and reducing costs.
Sooner or later, market gonna wakeup to this as a recovery play from Covid, increased refined product usage (especially jet fuel) and refinery recovery. To me you get paid 14percent ROC to wait for it. Distribution coverage is 1.4x. FYI All numbers from Stifel latest report FYI.
