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Suburban Propane Partners L.P. (SPH)
NYSE:SPH
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Suburban Propane
(NYSE:SPH)
Rating:66Neutral
Price Target:
$20.00
▲(7.64%Upside)
Positive Factors
Acquisitions
The $53mn acquisition of a New Mexico and Arizona distributor is expected to improve gallons sold and EBITDA generation in FY25.
Index Rebalancing
SPH benefited significantly from the recent Alerian index rebalancing, showing a 20% increase compared to a 10% increase for the broader AMZ index.
Weather Impact
Colder temperatures since the start of 2025 are expected to improve results for the second quarter.
Negative Factors
Financial Performance
SPH reported F4Q24 adj EBITDA results of $1mn that missed MSUSA ($5mn) and Street ($9mn) estimates.
Leverage
Leverage at the end of the first quarter was higher than management's target, driven by a propane acquisition and spending on RNG facilities.
Valuation Concerns
The company maintains an Underweight rating due to valuation concerns, elevated leverage, and ongoing capital requirements for RNG projects.
Suburban Propane (SPH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.20B
Dividend Yield7%
Average Volume (3M)151.84K
Price to Earnings (P/E)12.8
Beta (1Y)0.39
Revenue Growth4.02%
EPS Growth-14.66%
CountryUS
Employees3,098
SectorUtilities
Sector Strength77
IndustryRegulated Gas
Share Statistics
EPS (TTM)2.10
Shares Outstanding64,959,366
10 Day Avg. Volume82,691
30 Day Avg. Volume151,845
Financial Highlights & Ratios
PEG Ratio0.36
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio17.20
Enterprise Value/Market Cap2.19
Enterprise Value/Revenue0.48
Enterprise Value/Gross Profit4.36
Enterprise Value/Ebitda2.88
Forecast
1Y Price Target
$17.00Price Target Upside-8.50% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering1
Suburban Propane Business Overview & Revenue Model
Company DescriptionSuburban Propane Partners, L.P. is a publicly traded master limited partnership that specializes in the distribution of propane, fuel oil, and refined fuels. Founded in 1928 and headquartered in Whippany, New Jersey, the company operates in the energy sector, primarily serving residential, commercial, industrial, and agricultural customers. Suburban Propane offers a range of services including propane delivery, equipment installation, and maintenance, making it a key player in the U.S. energy distribution market.
How the Company Makes MoneySuburban Propane generates revenue primarily through the sale and delivery of propane, fuel oil, and other refined fuels to its diverse customer base. The company operates a vast network of distribution centers and a fleet of delivery vehicles, enabling it to efficiently meet customer demand across various regions. Key revenue streams include residential heating contracts, commercial fuel supply agreements, and industrial energy solutions. Additionally, Suburban Propane offers equipment rental and maintenance services, which provide supplementary income. The company's earnings are influenced by factors such as seasonal demand fluctuations, commodity price changes, and strategic partnerships with suppliers and service providers that enhance its distribution capabilities.
Suburban Propane Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q2-2025)
| % Change Since: -7.38%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performance in the propane segment with significant volume increases and financial improvements, supported by strategic acquisitions and partnerships. However, challenges in the renewable natural gas segment and increased operating expenses posed some concerns.Q2-2025 Updates
Positive Updates
Increase in Propane Volumes
Propane volumes for the quarter increased 15.5% compared to the prior year second quarter, marking the highest propane volume since 2018 during January 2025.
Adjusted EBITDA Growth
Adjusted EBITDA for the quarter increased by $28 million or 19.1% compared to the prior year second quarter.
Successful Propane Acquisition
The integration of a propane business acquired in New Mexico and Arizona exceeded expectations, marking the largest single propane acquisition since 2012.
Improved Financial Metrics
Consolidated leverage ratio improved to 4.54 times from 4.99 times at the end of the first quarter, and distribution coverage remained strong at 2.17 times.
Launch of ATM Equity Sales Program
Launched an ATM equity sales program, raising $8.8 million in net proceeds, which were used to repay outstanding debt under the revolver.
Partnership with NASCAR
Suburban Propane became the official propane partner of NASCAR, providing propane for new track dryers and other services at NASCAR events.
Negative Updates
Challenges in Renewable Natural Gas Segment
RNG production faced headwinds from cold temperatures impacting production and lower prices for California LCFS credits and D3 RIN prices.
Regulatory Ambiguity on Production Tax Credits
Ambiguity in US Treasury Department's proposed regulations on production tax credits affected RNG production and sales at the Stanfield facility.
Increased Operating Expenses
Combined operating and G&A expenses increased by $14.9 million or 9.7% compared to the prior year's second quarter, primarily due to higher payroll and benefit-related expenses.
Higher Net Interest Expense
Net interest expense increased by 3.3% due to higher average outstanding borrowings under the revolving credit facility.
Company Guidance
During the Suburban Propane Partners Second Quarter Earnings Conference Call for fiscal 2025, the company reported a 15.5% increase in propane volumes compared to the prior year's quarter, resulting in a $28 million or 19.1% increase in adjusted EBITDA. The company achieved a net income of $136.9 million or $2.11 per common unit, compared to $110.3 million or $1.71 per common unit in the prior year. Retail propane gallons sold in the quarter were 162 million gallons, and average temperatures were 5% warmer than normal and 9% cooler than the prior year's second quarter. The company raised $8.8 million through its ATM equity sales program, which was utilized to repay debt. Additionally, the company is advancing capital projects in Columbus, Ohio, and Upstate New York, and integrating a recent $53 million propane business acquisition. The company also discussed its renewable natural gas (RNG) operations, facing some challenges with lower California LCFS credits and D3 RIN prices, while continuing to enhance RNG production and efficiency at its Stanfield facility. The official propane partnership with NASCAR was highlighted as a strategic sponsorship to enhance brand visibility and align with sustainability initiatives.Suburban Propane Financial Statement Overview
Summary
Suburban Propane presents a stable financial position with strong operational cash flows and decent profitability margins. However, the company faces challenges with high leverage and a declining revenue trend. The focus on operational efficiency is a positive sign, but the company needs to address revenue growth to improve its financial outlook.Income Statement
The income statement shows a mixed performance. The TTM gross profit margin is approximately 4.35%, which is relatively low. The TTM net profit margin is around 7.19%, indicating moderate profitability. Revenue has shown a declining trend over the years, but the company managed to improve its EBIT and EBITDA margins in the TTM period to 18.27% and 22.25%, respectively, suggesting a focus on cost control and operational efficiency.65
Positive
Balance Sheet
The balance sheet reflects a challenging position with a high debt-to-equity ratio calculated at approximately 0.25, indicating significant leverage. The equity ratio stands at roughly 22.85%, reflecting a moderate level of equity financing. The return on equity (ROE) for the TTM is about 12.68%, indicating decent returns for shareholders despite the high leverage.58
Neutral
Cash Flow
Cash flow analysis reveals a solid performance with a strong operating cash flow to net income ratio of 2.63 for the TTM, indicating efficient cash generation from operations. The free cash flow to net income ratio is 1.59, highlighting effective capital expenditure management. However, free cash flow growth has been volatile, which could pose risks to future cash availability.70
Positive
| Breakdown | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.33B | 1.43B | 1.50B | 1.29B | 1.11B |
| Gross Profit | 328.12M | 361.00M | 789.34M | 803.28M | 724.95M |
| EBITDA | 216.47M | 260.39M | 259.64M | 296.59M | 252.13M |
| Net Income | 74.17M | 123.75M | 139.71M | 122.79M | 60.76M |
Balance Sheet | |||||
| Total Assets | 2.27B | 2.27B | 2.10B | 2.05B | 2.05B |
| Cash, Cash Equivalents and Short-Term Investments | 3.22M | 3.51M | 4.10M | 5.81M | 3.14M |
| Total Debt | 1.35B | 1.33B | 1.21B | 1.25B | 1.33B |
| Total Liabilities | 1.73B | 1.72B | 1.61B | 1.63B | 1.68B |
| Stockholders Equity | 547.06M | 546.36M | -12.60M | -17.58M | -25.78M |
Cash Flow | |||||
| Free Cash Flow | 101.16M | 180.29M | 176.19M | 196.70M | 176.86M |
| Operating Cash Flow | 160.59M | 225.24M | 220.55M | 226.55M | 209.35M |
| Investing Cash Flow | -81.64M | -170.64M | -94.44M | -34.08M | -53.24M |
| Financing Cash Flow | -72.50M | -44.63M | -127.82M | -189.81M | -155.41M |
Suburban Propane Technical Analysis
Positive
18.58
Price Trends
18.64
Negative
19.35
Negative
18.95
Negative
Market Momentum
-0.05
Negative
51.64
Neutral
64.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPH, the sentiment is Positive. The current price of 18.58 is above the 20-day moving average (MA) of 18.42, below the 50-day MA of 18.64, and below the 200-day MA of 18.95, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 51.64 is Neutral, neither overbought nor oversold. The STOCH value of 64.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPH.
Suburban Propane Risk Analysis
Suburban Propane disclosed 51 risk factors in its most recent earnings report. Suburban Propane reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Suburban Propane Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.83B | 22.46 | 9.04% | 2.14% | 20.41% | 13.64% | |
72 Outperform | $213.14M | 16.06 | 11.60% | 3.99% | 9.74% | -1.29% | |
71 Outperform | $1.65B | 16.43 | 7.36% | 4.79% | 3.88% | 11.80% | |
67 Neutral | $16.87B | 17.02 | 4.48% | 3.26% | 4.72% | 5.95% | |
66 Neutral | $1.20B | 12.83 | 14.42% | 7.00% | 4.02% | -14.66% | |
56 Neutral | $1.14B | 11.07 | -28.26% | 10.60% | -15.03% | -201.87% | |
47 Neutral | $1.86B | 1,996.19 | 0.11% | ― | ― | ― |
* Utilities Sector Average
Performance Comparison
SPH
Suburban Propane
18.58
1.12
6.41%
CPK
Chesapeake Utilities
121.56
4.60
3.93%
NWN
Northwest Gas
40.86
2.05
5.28%
RGCO
Rgc Resources
20.62
-0.63
-2.96%
NFE
New Fortress Energy
3.78
-16.20
-81.08%
CTRI
Centuri Holdings, Inc.
21.41
1.16
5.73%
Suburban Propane Corporate Events
Dividends
Suburban Propane Announces Quarterly Distribution
Neutral
Jul 24, 2025
On July 24, 2025, Suburban Propane Partners, L.P. announced a quarterly distribution of $0.325 per Common Unit for the fiscal third quarter, equating to an annualized rate of $1.30 per Common Unit. The distribution is payable on August 12, 2025, to unitholders of record as of August 5, 2025. The announcement also highlighted that all distributions to foreign investors are subject to U.S. federal income tax withholding due to their connection with a U.S. trade or business. This decision reflects the company’s ongoing commitment to providing returns to its investors while complying with regulatory requirements.
The most recent analyst rating on (SPH) stock is a Sell with a $17.00 price target. To see the full list of analyst forecasts on Suburban Propane stock, see the SPH Stock Forecast page.
Financial Disclosures
Suburban Propane Schedules Q3 2025 Results Call
Neutral
Jul 23, 2025
On July 23, 2025, Suburban Propane Partners, L.P. announced its Fiscal 2025 Third Quarter Results Conference Call, scheduled for August 7, 2025. The call will discuss the company’s third-quarter results and business outlook, providing insights for analysts, investors, and stakeholders.
The most recent analyst rating on (SPH) stock is a Sell with a $17.00 price target. To see the full list of analyst forecasts on Suburban Propane stock, see the SPH Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.