Market Overview

Antero Midstream's Weakness Belies Its Investment Potential


Shares of Antero Midstream Partners LP (NYSE: AM) represent an opportunity to buy into the growth of Appalachian energy production, according to Stifel.

The Denver-based company, which services natural gas and oil production by Antero Resources Corp (NYSE: AR), has seen “continued weakness,” analyst Brian Brungardt Jr. said in a Sunday note.

One factor in the weak pricing could be delays in permit approvals for Appalachia projects due to a lack of a quorum at the Federal Energy Regulatory Commission, or FERC, Brungardt said. The commission’s quorum was restored Aug. 10 after commissioner Robert Powelson was sworn in.

“In turn, we anticipate the project backlog will begin to clear, providing greater clarity for takeaway constraints to be resolved,” Brungardt said.

Stifel upgraded Antero Midstream Partners LP from Hold to Buy on Sunday and maintained a $23 target price.

Positioned For Growth

Antero Midstream is “well-positioned” to benefit from the long-term development of the Appalachia basin, Brungardt said.

The water volumes in the partnership between Antero Midstream and Antero Resources stands to benefit in the near-term from well design optimization, “which drives great production volumes per well on the gathering system,” the analyst said.

Antero Midstream also recently entered a joint venture for processing and fractionation, according to the Stifel note.

The research firm anticipates that the energy stock will outperform as investors become “more constructive” on future Appalachia volumes creating infrastructure demand for the company and on Antero Midstream’s cash flow.

Related Links:

Baird Sees Antero Midstream As An 'Undervalued Long-Term Growth' Play; Upgrades To Outperform

Magellan Midstream Riding The Wave Of Rising US Oil Exports

Posted-In: Brian Brungardt Jr. FERC StifelAnalyst Color Upgrades Analyst Ratings


Related Articles (AM + AR)

View Comments and Join the Discussion!

Latest Ratings

View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Traders Have Been All Over These Tech ETFs

Know This Natural Gas ETF