Equitrans Midstream Corporation (ETRN) | Investment Case

1. Company Snapshot

1.a. Company Description

Equitrans Midstream Corporation owns, operates, acquires, and develops natural gas gathering, transmission and storage, and water services assets in the Appalachian Basin.It operates through three segments: Gathering System, Transmission and Storage System, and Water Service System.The Gathering System segment include 1,130 miles of high-pressure gathering lines with compression of approximately 485,000 horsepower and multiple interconnect points; and approximately 910 miles of Federal Energy Regulatory Commission (FERC) low-pressure gathering lines.

The Transmission and Storage System segment comprises 950 miles of FERC regulated interstate pipeline that connects to seven interstate pipelines and local distribution companies.The Water Service System segment include two independent systems comprised approximately 200 miles of pipeline that deliver fresh water from the Monongahela River, the Ohio River, local reservoirs, and various regional waterways.Equitrans Midstream Corporation was incorporated in 2018 and is headquartered in Canonsburg, Pennsylvania.

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1.b. Last Insights on ETRN

Equitrans Midstream Corporation's recent developments have been negatively impacted by the impending acquisition by EQT Corp. The acquisition, expected to close soon, has led to Equitrans' removal from the Tortoise North American Pipeline Index and the Tortoise Decarbonization Infrastructure Index. Additionally, Equitrans will be replaced by Abercrombie & Fitch in the S&P MidCap 400. The acquisition may lead to integration challenges and potential disruptions to Equitrans' operations. Furthermore, the company's removal from key indices may result in reduced investor interest and liquidity.

1.c. Company Highlights

Last Price	12.42
Change Percentage	0.57%
Open	12.36
Previous Close	12.35
Market Cap ( Millions)	5427
Volume	194201160
Year High	14.64
Year Low	8.57
M A 50	13.49
M A 200	11.4

FCF Yield	11.60%
Dividend Yield	0.00%
ROE	26.77%
Debt / Equity	439.75%
Net Debt / EBIDTA	607.21%
Price To Book	3.12
Price Earnings Ratio	12.11
Price To FCF	8.62
Price To sales	3.89
EV / EBITDA	10.57

2. Transcript Summary

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3. NewsRoom

Tortoise Announces Constituent Changes Due to Corporate Action

Jul -22

Source: accesswire.com

Abercrombie & Fitch Set to Join S&P MidCap 400; Gates Industrial to Join S&P SmallCap 600

Jul -16

Source: prnewswire.com

Equitrans and EQT Announce Deadline for Equitrans Preferred Stock Election

Jun -24

Source: businesswire.com

2 Energy Stocks Likely to Benefit From MVP's Operational Launch

Jun -18

Source: zacks.com

Mountain Valley Pipeline Begins Operations

Jun -14

Source: businesswire.com

FERC OK's Mountain Valley Pipeline: A Brief on the Project

Jun -12

Source: zacks.com

EQUITRANS MIDSTREAM INVESTOR ALERT by the Former Attorney General of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of Equitrans Midstream Corporation - ETRN

May -13

Source: businesswire.com

EQT: Cementing Position As Low-Cost Gas Producer (Raising Target Price)

May -08

Source: Seeking Alpha

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.53%)

6. Segments

Gathering

Expected Growth: 5.6%

Increasing natural gas production, growing demand for midstream infrastructure, and Equitrans Midstream Corporation's strategic expansion plans drive growth in the gathering segment.

Transmission

Expected Growth: 5.4%

Increasing demand for natural gas, expansion of pipeline infrastructure, and growing production in the Appalachian Basin drive growth in transmission services from Equitrans Midstream Corporation.

Water

Expected Growth: 5.5%

Growing demand for water services in the Appalachian Basin, driven by increasing oil and gas production, and Equitrans Midstream's strategic expansion of its water infrastructure, are expected to drive segment growth.

7. Detailed Products

Gathering

Equitrans Midstream Corporation provides gathering services to transport natural gas from the wellhead to processing facilities or transmission pipelines.

Transmission

Equitrans Midstream Corporation operates transmission pipelines that transport natural gas from processing facilities to markets, including local distribution companies, power generation facilities, and industrial users.

Storage

Equitrans Midstream Corporation provides natural gas storage services, allowing customers to inject and withdraw natural gas as needed to meet seasonal demand fluctuations.

Processing

Equitrans Midstream Corporation operates natural gas processing facilities that separate natural gas liquids (NGLs) from the natural gas stream, producing marketable products such as ethane, propane, and butane.

8. Equitrans Midstream Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Equitrans Midstream Corporation is medium due to the availability of alternative energy sources and transportation methods.

Bargaining Power Of Customers

The bargaining power of customers for Equitrans Midstream Corporation is low due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Equitrans Midstream Corporation is medium due to the company's dependence on a few key suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for Equitrans Midstream Corporation is low due to the high barriers to entry in the midstream energy industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Equitrans Midstream Corporation is high due to the competitive nature of the midstream energy industry, with many established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	81.47%
Debt Cost	5.39%
Equity Weight	18.53%
Equity Cost	13.72%
WACC	6.94%
Leverage	439.75%

11. Quality Control: Equitrans Midstream Corporation passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Western Midstream Partners

A-Score: 7.1/10

Value: 5.1

Growth: 6.6

Quality: 7.2

Yield: 10.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

DT Midstream

A-Score: 6.6/10

Value: 3.2

Growth: 6.0

Quality: 6.5

Yield: 7.0

Momentum: 8.5

Volatility: 8.3

1-Year Total Return ->

Plains GP Holdings

A-Score: 6.6/10

Value: 8.1

Growth: 3.6

Quality: 3.9

Yield: 10.0

Momentum: 4.5

Volatility: 9.3

1-Year Total Return ->

Plains All American Pipeline

A-Score: 6.5/10

Value: 7.8

Growth: 3.6

Quality: 4.5

Yield: 10.0

Momentum: 4.0

Volatility: 9.0

1-Year Total Return ->

EnLink Midstream

A-Score: 4.6/10

Value: 3.5

Growth: 5.4

Quality: 2.8

Yield: 5.0

Momentum: 4.5

Volatility: 6.3

1-Year Total Return ->

Equitrans Midstream

A-Score: 3.8/10

Value: 2.2

Growth: 3.0

Quality: 5.0

Yield: 5.0

Momentum: 5.0

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.11%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.94%

Equitrans Midstream Corporation - US2946001011

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ETRN

1.c. Company Highlights

Expensive

Lower Growth

Higher Yield

Earnings Miss

Revenues Beats

Strong Momentum

Earnings Beats

Revenues Miss

Average Yield

Less Volatile

Fairly Valued

Stable Momentum

Medium Volatility

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.53%)

6. Segments

Gathering

Expected Growth: 5.6%

Transmission

Expected Growth: 5.4%

Water

Expected Growth: 5.5%

7. Detailed Products

Gathering

Transmission

Storage

Processing

8. Equitrans Midstream Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Equitrans Midstream Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.42$

Current Price

12.42$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA