UGI Buy Rating: Positive Earnings, Strategic Financial Flexibility, and Growth Catalysts

Mizuho Securities analyst Gabe Moreen has maintained their bullish stance on UGI stock, giving a Buy rating on January 31.

Gabe Moreen has given his Buy rating due to a combination of factors that indicate a positive outlook for UGI. The company reported first quarter earnings per share that surpassed expectations, reflecting favorable conditions such as stable AmeriGas Partners (APU) volumes and strategic financial maneuvers like an intercompany loan that enhances financial flexibility. UGI also benefits from potential near-term catalysts, including favorable weather patterns and natural gas volume increases, alongside medium-term opportunities like APU stabilization and possible asset sales.
Moreen also highlights UGI’s management’s ongoing efforts to improve operations at APU through a new regional approach, which could lead to further improvements irrespective of external weather conditions. Additionally, the intercompany loan is seen as a positive signal for APU noteholders, as it suggests a commitment to address upcoming debt maturities. Furthermore, the company’s reaffirmation of its earnings guidance and the potential for upside due to lower tax rates and market conditions contribute to the positive recommendation, despite some mixed segment results.

Moreen covers the Energy sector, focusing on stocks such as Archrock, Kinder Morgan, and Energy Transfer. According to TipRanks, Moreen has an average return of 17.1% and an 80.31% success rate on recommended stocks.

In another report released on January 31, Jefferies also maintained a Buy rating on the stock with a $35.00 price target.