DT Midstream's Flagged Third-Quarter Dip Tests Whether Its Backlog Story Can Revive A Sliding Stock

DT Midstream heads into its third-quarter report with an unusual setup: management has already told investors the quarter will be softer, and the stock has been punished anyway. Since the last report, shares have fallen 8.1% while the S&P 500 gained 4.5%, a 12.6-point gap that has opened even as the company's long-term growth pipeline kept expanding. That disconnect makes this report less about the quarter itself and more about whether the near-term wobble is as temporary as management insists.

Wall Street expects earnings of $1.02 per share on revenue of $331.3 million, before the market opens on October 29. Revenue would be up 5.5% from a year ago, but earnings would fall about 9.7% from the $1.13 posted in the same quarter last year and decline from the $1.09 reported last quarter. Revenue would also slip from the prior quarter's $343.0 million. That pattern fits what management previewed. On the last call, executives said the third quarter would come in below a strong second quarter because of gathering maintenance and lower Northeast volumes tied to the timing of producer activity. Second-quarter adjusted EBITDA of $305 million had already eased slightly from $308 million in the first quarter, so the Street is pricing in a modest, telegraphed dip rather than a deterioration.

The more important question is whether full-year guidance survives intact. The 2026 adjusted EBITDA range of $1.155 billion to $1.225 billion was reaffirmed last quarter, not raised, despite a strong first half. A reaffirmation this time, alongside a clear explanation that the Northeast softness is timing-related, would validate the narrative. Any sign that producer delays are stretching into the fourth quarter, or that low Henry Hub prices are prompting Haynesville curtailments, would challenge it. Management downplayed curtailment risk, but Haynesville gathering set a record of 2.2 Bcf per day last quarter, so even a flattening of that figure would draw attention.

The constructive case rests on growth capital and project momentum. Committed capital for 2026 rose to about $425 million and for 2027 to roughly $560 million, up from about $400 million and $440 million a quarter earlier, following a roughly 50% jump in the five-year organic backlog to $3.4 billion. The second quarter added around $300 million of new final investment decisions, including the LEAP expansion to 2.3 Bcf per day and a 380 MMcf per day Nexus interconnect serving an Ohio data center. Growth spending of $86 million in the second quarter left a back-half ramp still to come, so higher capex this quarter would be evidence the backlog is converting into steel in the ground. Investors should also look for progress on the MIST binding open season, Guardian's G3 filing, the Vector expansions and any additional data-center interconnects that would extend the run of steady project announcements.

Sentiment has cooled, slipping to 10.5% bullish from 15.4% before the prior report, and the chart reflects that fatigue. At $122.48, the stock sits well below its 200-day moving average of $134.52 and closer to the bottom of its post-earnings range of $115.92 to $138.89, a range that sits entirely beneath the prior quarter's $135 to $152.88 band. Expectations, in other words, look tempered rather than stretched, which lowers the bar for a reassuring print but also suggests the market wants proof rather than promises.

Ultimately, this report hinges on whether management can show that the third-quarter softness is a scheduled pause and not the start of a trend. If guidance holds, Northeast volumes are framed as recovering and committed capital keeps climbing, the gap between the company's increasingly bullish multi-year outlook and its lagging stock price becomes harder to justify. If the dip looks deeper or guidance shifts toward the low end, the market's skepticism will have found its footing.

This earnings preview was originally published on Earnings Whispers.

This article is for informational purposes only and is not investment advice. Earnings Whispers and its staff may hold positions in the securities mentioned. It was generated automatically, with the help of AI, from Earnings Whispers and company data, and checked by Earnings Whispers before publication.