Western Midstream Partners (WES – Research Report), the Energy sector company, was revisited by a Wall Street analyst yesterday. Analyst Robert Kad from Morgan Stanley maintained a Sell rating on the stock and has a $43.00 price target.
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Robert Kad has given his Sell rating due to a combination of factors impacting Western Midstream Partners’ financial performance. The company’s adjusted EBITDA of $593.6 million fell short of both consensus expectations of $598.6 million and Morgan Stanley’s estimate of $625.3 million, indicating a slight underperformance in earnings. Additionally, the crude oil and NGL throughput showed a significant decline of 12.7% year-over-year, which suggests operational challenges in maintaining production levels.
Moreover, the adjusted gross margin for crude oil and NGLs decreased by 4.5% compared to the previous year, further highlighting pressure on profitability. While the natural gas segment showed a modest improvement in adjusted gross margin, the produced water segment experienced a decline in margin both year-over-year and quarter-over-quarter. These factors combined suggest potential difficulties in sustaining growth and profitability, leading to the Sell rating by Robert Kad.