NGL Energy Partners LP (NGL) shares ended the last trading session 8.8% higher at $11.1. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 8.6% gain over the past four weeks.
The surge can be attributed to NGL Energy Partners strong foothold in diversified midstream operations and an expected improvement in demand for crude products in the United States. NGL Energy Partners LP, a diversified midstream energy partnership company operates through three segments including water solutions, crude oil logistics, and liquids logistics with water solutions segment being the key earnings driver. Water solutions segment spans in six counties in New Mexico and Texas representing the most prolific crude oil producing areas in the U.S with low production costs thereby able to withstand the soft crude pricing environment. Moreover, the soft crude pricing environment creates a favorable environment for the refining sector. With increased demand for crude by the refiners will result in increased demand for partnership’s crude oil logistic segment as it purchases crude oil from producers and marketers and transports it to refineries for resale and generates stable fee-based revenue. The partnership company’s strong foothold in water solutions and crude oil logistic operations, coupled with the consistent demand for its midstream services due to increased demand for refined products has been key growth drivers for the partnership firm.
This company is expected to post quarterly earnings of $0.16 per share in its upcoming report, which represents a year-over-year change of +233.3%. Revenues are expected to be $700.76 million, down 54.8% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For NGL Energy Partners, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NGL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
NGL Energy Partners is a member of the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry. One other stock in the same industry, CrossAmerica Partners (CAPL), finished the last trading session 1.1% higher at $22.77. CAPL has returned 8% over the past month.
For CrossAmerica, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.05. This represents a change of -88.1% from what the company reported a year ago. CrossAmerica currently has a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).
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