Mizuho Securities analyst Gabe Moreen has maintained their neutral stance on USAC stock, giving a Hold rating on February 11.
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Gabe Moreen has given his Hold rating due to a combination of factors surrounding USA Compression’s financial performance and future outlook. While the company reported robust fourth-quarter results for 2024, surpassing previous estimates, the forecast for the fiscal year 2025 was less promising than anticipated. The initial EBITDA guidance for FY25 fell short of expectations, and there are concerns about the potential impacts of primary term contracts on revenue growth.
Moreover, although USA Compression plans to expand its operating horsepower and has shown interest in ordering new units, there are still challenges related to deleveraging that could constrain future growth. The company’s commitment to maintaining a conservative approach in its capital expenditures, alongside its focus on debt refinancing and distribution coverage, suggests a cautious path forward. These mixed signals contribute to the Hold rating, as the potential for upside is tempered by financial constraints and conservative projections.
In another report released on February 11, Stifel Nicolaus also maintained a Hold rating on the stock with a $28.00 price target.