- Record Q4 2025 EBITDA: Surpassed $2.7 billion, up from $2.6 billion in 2024, driven by new asset startups.
- 2025 Net Income: $1.6 billion (75¢/unit), with $300 million in common unit repurchases, including $50 million in Q4.
- 2026 Growth Outlook: Modest EBITDA/cash flow growth (3-5%), with $2.5–2.9 billion organic CapEx and $580 million sustaining CapEx.
- Debt and Leverage: Total debt of $34.7 billion as of 2025, with leverage ratio of 3.3x expected to return to 2.75–3.25x by 2026.
- 2027 Projections: 10% EBITDA/cash flow growth, $1 billion discretionary FCF (55-60% for buybacks), and full utilization of Neches River terminal.
Financial Performance
The company's adjusted EBITDA increased 4% to $2.7 billion in the fourth quarter compared to $2.6 billion in 2024. As Jim Teague stated, "the company's fourth quarter exit rate is more ratable than not," indicating a strong start to 2026. The company's leverage ratio is currently 3.3x but is expected to return to its target range of 2.75 to 3.25 by 2026.
Growth Prospects
For 2026, the company expects moderate adjusted EBITDA and cash flow growth, driven by the ramp-up of assets completed in 2025 and new projects that will come online throughout the year. The company expects to return to its mid-cycle range for organic growth capital expenditures in 2026, with a range of $2.5 billion to $2.9 billion. The company is also expecting 10% growth in adjusted EBITDA and cash flow in 2027, driven by the LPG expansion and Neches River terminal.
Valuation
With a P/E Ratio of 13.09 and an EV/EBITDA of 11.19, the company's valuation appears reasonable considering its growth prospects. The Dividend Yield of 6.28% is also attractive, indicating a stable return for investors. The Net Debt / EBITDA ratio of 3.45 is slightly above the target range, but is expected to improve by 2026.
Outlook
The company's producer customers are seeing strong growth in the Permian, with an estimated 500 wells turning to production in 2026 and more in 2027. The company's Midland volumes are outperforming expectations, and the company is well-positioned to meet the growing demand. Analysts estimate next year's revenue growth at 7.9%, indicating a positive outlook for the company.