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Suburban Propane Partners L.P. (SPH)
NYSE:SPH
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Suburban Propane
(NYSE:SPH)
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Rating:65Neutral
Price Target:
$21.00
▲(3.65% Upside)
Action:DowngradedDate:02/07/26
SPH’s score is driven by attractive valuation (low P/E and high yield) and improving/constructive momentum in the share price, supported by a largely positive earnings-call backdrop (EBITDA growth, RNG progress, refinancing and improved leverage). Offsetting these positives, the financial profile remains constrained by high leverage, weaker TTM revenue, and a meaningful decline in free cash flow/cash conversion.
Positive Factors
EBITDA & Margin Resilience
Sustained adjusted EBITDA growth and resilient operating margins indicate durable operational leverage: higher volumes and slight unit margin gains show the core distribution business can expand profitability even when wholesale prices move, supporting reinvestment, distributions and long-term cash generation.
RNG Growth & Diversification
Progress on RNG infrastructure shifts revenue mix toward renewable fuel production, creating recurring, higher-value cash flows and regulatory upside. With capital spending guided and commissioning underway, RNG adds a structural growth vector and decarbonization alignment that reduces reliance on commodity propane cycles.
Proactive Refinancing & Maturity Extension
Extending debt maturities and completing a $350M 2035 issuance materially reduces near-term refinancing risk, lengthens the liability profile, and improves financial flexibility. This gives management time to execute RNG and M&A plans while smoothing peak funding needs across cycles.
Negative Factors
Elevated Leverage
High absolute leverage and a debt-heavy capital structure constrain strategic optionality: interest obligations and covenants limit free cash deployment, increase refinancing sensitivity in stress periods, and reduce resilience to protracted commodity price weakness or prolonged demand softness.
Weakening Free Cash Flow
A sharp decline in free cash flow and subpar cash conversion signal working-capital swings and higher cash outlays versus reported earnings. Persistent FCF weakness raises reliance on credit lines for seasonal funding and constrains capacity to fund capex, opportunistic M&A or maintain distributions without external financing.
Top-line Pressure & Inventory Overhang
Material TTM revenue decline combined with elevated national propane inventories creates structural headwinds: surplus supply depresses wholesale prices, intensifies margin volatility and prolongs recovery of volumes and pricing, challenging sustainable top-line growth absent demand normalization or market rebalancing.
Suburban Propane (SPH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.34B
Dividend Yield6.97%
Average Volume (3M)146.40K
Price to Earnings (P/E)10.0
Beta (1Y)0.36
Revenue Growth7.94%
EPS Growth43.23%
CountryUS
Employees3,098
SectorUtilities
Sector Strength65
IndustryRegulated Gas
Share Statistics
EPS (TTM)0.70
Shares Outstanding66,331,480
10 Day Avg. Volume169,712
30 Day Avg. Volume146,400
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)2.02
Price to Sales (P/S)0.84
P/FCF Ratio10.57
Enterprise Value/Market Cap2.13
Enterprise Value/Revenue2.00
Enterprise Value/Gross Profit4.72
Enterprise Value/Ebitda10.12
Forecast
1Y Price Target
$17.00Price Target Upside-16.09% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering1
EPS Forecast (FY)1.88
Revenue Forecast (FY)$1.45B
Suburban Propane Business Overview & Revenue Model
Company DescriptionSuburban Propane Partners, L.P., through its subsidiaries, engages in the retail marketing and distribution of propane, fuel oil, and refined fuels. The company operates in four segments: Propane, Fuel Oil and Refined Fuels, Natural Gas and Electricity, and All Other. The Propane segment is involved in the retail distribution of propane to residential, commercial, industrial, and agricultural customers, as well as in the wholesale distribution to industrial end users. It offers propane primarily for space heating, water heating, cooking, and clothes drying in the residential and commercial markets; for use as a motor fuel in internal combustion engines to power over-the-road vehicles, forklifts, and stationary engines, as well as to fire furnaces, as a cutting gas to the industrial customers, and in other process applications; and for tobacco curing, crop drying, poultry brooding, and weed control in the agricultural markets. The Fuel Oil and Refined Fuels segment engages in the retail distribution of fuel oil, diesel, kerosene, and gasoline to residential and commercial customers for use primarily as a source of heat in homes and buildings. The Natural Gas and Electricity segment markets natural gas and electricity to residential and commercial customers in the deregulated energy markets in New York and Pennsylvania. The All Other segment sells, installs, and services a range of home comfort equipment, including whole-house heating products, air cleaners, humidifiers, and space heaters. As of September 25, 2021, the company served approximately 1.0 million residential, commercial, industrial, and agricultural customers through 700 locations in 41 states primarily in the east and west coast regions of the United States, as well as portions of the Midwest region of the United States and Alaska. Suburban Energy Services Group LLC serves as a general partner of Suburban Propane Partners, L.P. The company was founded in 1945 and is headquartered in Whippany, New Jersey.
How the Company Makes MoneySuburban Propane generates revenue primarily through the sale of propane and related products and services. The company makes money by selling propane to residential, commercial, and industrial customers on a retail basis. Key revenue streams include the sale of propane fuel, lease and sale of propane tanks, and the provision of installation and maintenance services for propane systems. Additionally, Suburban Propane may engage in bulk propane sales to large industrial customers, creating further revenue opportunities. The company also benefits from strategic partnerships with suppliers and manufacturers of propane appliances, enhancing its product offerings and customer service capabilities. Overall, Suburban Propane's earnings are driven by the volume of propane sold, pricing strategies, and the efficiency of its distribution network.
Suburban Propane Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call presents a predominantly positive operational and financial performance: solid top-line volume growth, double-digit adjusted EBITDA improvement (+10.8%), higher net income and EPS, progress on RNG projects, targeted acquisitions, and proactive balance-sheet actions (refinancing and improved leverage). Headwinds include weaker wholesale propane prices (down 14%), elevated inventories (up 34% YoY), modest expense increases, weather-driven regional demand variability, and seasonally higher revolver borrowings — but management frames these as manageable and consistent with strategy. On balance, the positive operational momentum, margin expansion, RNG and M&A progress, and strong distribution coverage outweigh the near-term market and cost pressures.Q1-2026 Updates
Positive Updates
Adjusted EBITDA Growth
Adjusted EBITDA of $83.4 million for the quarter, an increase of $8.1 million or 10.8% year-over-year, driven by higher volumes and improved unit margins.
Net Income and EPS Improvement
Net income was $46.6 million (or $0.70 per common unit), up from $38.0 million (or $0.59 per common unit) in the prior year quarter — an increase of about 22.6% in net income and ~18.6% in EPS.
Volume Increase — Retail Propane Sales
Retail propane gallons sold totaled 110.2 million gallons, up 4.2% year-over-year, driven by colder weather in the Eastern U.S. and organic customer base growth plus recent acquisitions.
Gross Margin and Unit Margin Expansion
Gross margin (excluding mark-to-market commodity hedge adjustments) was $238.6 million, up $16.1 million or 7.2% year-over-year; propane unit margins increased by $0.08 per gallon (approximately +4%).
RNG Operational Progress
RNG average daily injection increased sequentially and year-over-year due to operational enhancements at Stanfield, AZ; commissioning began on a new anaerobic digester in Upstate NY in December 2025; Columbus gas upgrade work progressing. RNG capital projects remain on track for completion toward the end of Q2 with injections planned in the second half of the fiscal year.
Disciplined Capital Allocation and Acquisitions
Total capital spending for the quarter was $19.8 million ($13.0 million for propane operations and $6.8 million for RNG growth). Completed acquisition of two California propane businesses for $24 million and continued disciplined investment in growth projects.
Balance Sheet Actions and Distribution
Refinanced 2027 senior notes at an attractive rate with a ten-year maturity, maintained strong distribution coverage at 2.19x (trailing twelve months) and declared a quarterly distribution of $0.0325 per common unit (annualized $1.30). Consolidated leverage improved to 4.57x from 4.99x year-over-year.
Negative Updates
Wholesale Propane Price Pressure
Average wholesale propane price was $0.66 per gallon (Mont Belvieu), down 14% compared to the prior year first quarter, driven by elevated U.S. inventories and regional weather variability.
High U.S. Propane Inventories
U.S. propane inventories totaled 89 million barrels (end of last week reported), 34% higher than a year ago and 28% above historical averages, creating downward pressure on wholesale pricing and margin volatility.
Rising Operating Costs
Combined operating and G&A expenses increased $5.0 million or 3.4% year-over-year, primarily from higher payroll and benefit-related costs, overtime, other variable operating costs to support increased demand, and higher variable compensation expense.
Weather Variability and Operational Strain
While the Eastern U.S. saw colder conditions that boosted demand, the Western U.S. was 24% warmer than normal (11% warmer year-over-year), reducing demand there. The company also noted harsh weather conditions that persisted into Q2, creating operational challenges and higher overtime/variable costs.
Increased Short-Term Borrowing
Seasonal borrowing under the revolving credit facility totaled $115.4 million in the quarter to fund working capital, RNG capex, acquisition costs and refinancing expenses — increasing short-term leverage and interest-bearing debt usage despite an improved leverage ratio.
Smaller Unrealized Hedge Gains
Unrealized mark-to-market gain on commodity hedges was $0.93 million in the quarter compared with $3.6 million in the prior year quarter, reducing an offset to commodity-related volatility.
Company Guidance
The call’s guidance was operational and capital-focused: management reiterated RNG project timing (capital projects on track for completion toward the end of Q2 with RNG injections scheduled to begin in the second half of fiscal 2026) and maintained full-year RNG capital spending of $30–35 million, noting $6.8 million of RNG spend in Q1 (total Q1 capex $19.8 million, $13.0 million for propane operations). They signaled continued disciplined balance-sheet management — including refinancing 2027 senior notes to a 10‑year maturity at an attractive rate, $115.4 million drawn on the revolver in Q1, $3.1 million net ATM proceeds, and ample revolver capacity — and said working capital typically peaks late February/early March after which they expect to generate excess cash to strengthen the balance sheet. Key reported metrics reinforcing the outlook included Q1 net income of $46.6 million ($0.70/unit), adjusted EBITDA of $83.4 million (up $8.1 million or 10.8% YoY), retail gallons sold of 110.2 million (up 4.2% YoY), gross margin of $238.6 million (up $16.1 million or 7.2%), propane unit margin improvement of $0.08/gal (4%), average wholesale propane price of $0.66/gal (down 14% YoY), US propane inventories of 89 million barrels (+34% YoY, +28% vs. historical avg), Q1 net interest expense $19.8 million (flat), consolidated leverage of 4.57x (TTM Dec 2025, improved from 4.99x), and declared quarterly distribution $0.0325/unit (annualized $1.30, distribution coverage 2.19x TTM).Suburban Propane Financial Statement Overview
Summary
Profitability is solid (EBIT margin ~14.8%, net margin ~9.3%) with improved TTM earnings versus FY2024, but the overall profile is held back by elevated leverage (debt-to-equity ~2.4x) and weakening cash generation (TTM FCF ~$61.9M, ~-45.9% decline; cash conversion ~48% of net income). Revenue is also down ~20.5% TTM, signaling soft top-line momentum.Income Statement
TTM (Trailing-Twelve-Months) profitability is solid with healthy operating and net margins (EBIT margin ~14.8%, net margin ~9.3%), and earnings improved versus FY2024 (net income $132.9M vs $74.2M). The key weakness is top-line momentum: revenue is down ~20.5% in TTM, following a choppy multi-year revenue trend, which raises questions on near-term demand/price normalization even as margins remain resilient.64
Positive
Balance Sheet
Leverage is elevated with debt-to-equity around ~2.4x in TTM and total debt of ~$1.51B against equity of ~$626M, limiting balance-sheet flexibility. Offsetting this, profitability on equity is strong (TTM ROE ~20.9%), suggesting the company is generating solid returns despite the higher debt load. Overall, the balance sheet is serviceable but carries above-average financial risk.46
Neutral
Cash Flow
Cash generation is positive but has weakened: TTM operating cash flow is ~$129.8M and free cash flow ~$61.9M, with free cash flow down sharply (about -45.9% growth). Cash conversion is only moderate, with operating cash flow and free cash flow each running at ~48% of net income in TTM, implying working-capital swings and/or higher cash outlays are pressuring cash versus reported earnings.52
Neutral
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.43B | 1.43B | 1.33B | 1.43B | 1.50B | 1.29B |
| Gross Profit | 604.61M | 302.69M | 804.98M | 361.00M | 789.34M | 803.28M |
| EBITDA | 282.16M | 256.23M | 216.47M | 260.39M | 265.18M | 317.79M |
| Net Income | 132.93M | 106.57M | 74.17M | 123.75M | 139.71M | 122.79M |
Balance Sheet | ||||||
| Total Assets | 2.40B | 2.30B | 2.27B | 2.27B | 2.10B | 2.05B |
| Cash, Cash Equivalents and Short-Term Investments | 3.51M | 3.71M | 3.22M | 3.51M | 4.10M | 5.81M |
| Total Debt | 1.51B | 1.33B | 1.35B | 1.33B | 1.21B | 1.25B |
| Total Liabilities | 1.77B | 1.70B | 1.73B | 1.72B | 1.61B | 1.63B |
| Stockholders Equity | 626.22M | 598.57M | 547.06M | 546.36M | 497.53M | 425.42M |
Cash Flow | ||||||
| Free Cash Flow | 61.89M | 114.30M | 101.16M | 180.29M | 176.19M | 196.70M |
| Operating Cash Flow | 129.81M | 186.26M | 160.59M | 225.24M | 220.55M | 226.55M |
| Investing Cash Flow | -95.03M | -128.25M | -81.64M | -170.64M | -94.44M | -34.08M |
| Financing Cash Flow | -45.62M | -66.74M | -72.50M | -44.63M | -127.82M | -189.81M |
Suburban Propane Technical Analysis
Positive
20.26
Price Trends
19.11
Positive
18.69
Positive
18.24
Positive
Market Momentum
0.35
Positive
62.54
Neutral
79.00
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 20.26 is above the 20-day moving average (MA) of 20.00, above the 50-day MA of 19.11, and above the 200-day MA of 18.24, indicating a bullish trend. The MACD of 0.35 indicates Positive momentum. The RSI at 62.54 is Neutral, neither overbought nor oversold. The STOCH value of 79.00 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
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.04B | 19.54 | 7.20% | 4.18% | 11.27% | 20.04% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $1.34B | 9.98 | 22.70% | 6.97% | 7.94% | 43.23% | |
64 Neutral | $3.09B | 23.14 | 9.13% | 2.15% | 17.15% | 15.00% | |
62 Neutral | $219.01M | 16.87 | 11.98% | 3.75% | 12.63% | 10.99% | |
56 Neutral | $3.08B | 1,138.57 | 0.45% | ― | ― | ― | |
43 Neutral | $358.54M | -0.27 | -96.21% | ― | -27.23% | -634.60% |
* Utilities Sector Average
SPH
Suburban Propane
20.26
0.39
1.96%
CPK
Chesapeake Utilities
134.39
12.53
10.28%
NWN
Northwest Gas
50.11
10.41
26.23%
RGCO
Rgc Resources
21.07
1.60
8.22%
NFE
New Fortress Energy
1.22
-9.68
-88.81%
CTRI
Centuri Holdings, Inc.
31.85
13.70
75.48%
Suburban Propane Corporate Events
Dividends
Suburban Propane Declares Quarterly Cash Distribution for Unitholders
Positive
Jan 22, 2026
On January 22, 2026, Suburban Propane Partners, L.P. announced that its Board of Supervisors declared a quarterly cash distribution of $0.325 per common unit for the fiscal first quarter ended December 27, 2025, equivalent to an annualized rate of $1.30 per common unit, payable on February 10, 2026 to unitholders of record as of February 3, 2026. The partnership also clarified that, for foreign investors, 100% of the distribution is treated as income effectively connected with a U.S. trade or business and is fully subject to federal income tax withholding at the highest applicable effective tax rate, positioning brokers and nominees as withholding agents and underscoring the tax-sensitive nature of Suburban Propane’s distributions for non-U.S. holders.
The most recent analyst rating on (SPH) stock is a Hold with a $20.00 price target. To see the full list of analyst forecasts on Suburban Propane stock, see the SPH Stock Forecast page.
Business Operations and StrategyFinancial Disclosures
Suburban Propane Sets Call on Fiscal Q1 Outlook
Neutral
Jan 21, 2026
On January 21, 2026, Suburban Propane Partners, L.P. announced it will hold a conference call on February 5, 2026, at 9:00 a.m. Eastern Time to discuss its fiscal 2026 first-quarter results and business outlook, with live access and replay available via telephone and the company’s website. The scheduled call underscores the partnership’s ongoing engagement with analysts and investors and provides stakeholders with an opportunity to assess the company’s financial performance and strategic direction in the evolving energy market.
The most recent analyst rating on (SPH) stock is a Hold with a $20.00 price target. To see the full list of analyst forecasts on Suburban Propane stock, see the SPH Stock Forecast page.
Business Operations and StrategyPrivate Placements and Financing
Suburban Propane Completes $350 Million Senior Notes Offering
Positive
Dec 22, 2025
On December 22, 2025, Suburban Propane Partners, L.P. and its subsidiary Suburban Energy Finance Corp. completed a $350 million private issuance of 6.500% senior notes due 2035 to qualified institutional buyers and certain non-U.S. investors, under an indenture that imposes covenants limiting additional debt, dividends, asset sales, affiliate transactions and certain structural changes. The unsecured senior notes, which rank pari passu with Suburban’s existing unsecured senior debt and are structurally subordinated to the obligations of its operating subsidiaries, generated net proceeds of approximately $344.3 million that have been or will be used, together with borrowings under a revolving credit facility, to redeem all outstanding 5.875% senior notes due 2027, with the 2027 notes satisfied and discharged on December 22, 2025 and full redemption scheduled for January 7, 2026, effectively extending the company’s debt maturity profile and reshaping its capital structure.
The most recent analyst rating on (SPH) stock is a Buy with a $22.00 price target. To see the full list of analyst forecasts on Suburban Propane stock, see the SPH Stock Forecast page.
Business Operations and StrategyPrivate Placements and Financing
Suburban Propane Announces $350M Senior Notes Offering
Positive
Dec 8, 2025
On December 8, 2025, Suburban Propane Partners, L.P. announced the pricing of its $350 million offering of 6.500% senior notes due 2035 in a private placement. The offering is expected to close on December 22, 2025, and the proceeds, along with borrowings under its revolving credit facility, will be used to redeem all outstanding 5.875% senior notes due 2027. This strategic financial move aims to optimize the company’s debt structure and potentially enhance its market positioning.
The most recent analyst rating on (SPH) stock is a Buy with a $22.00 price target. To see the full list of analyst forecasts on Suburban Propane stock, see the SPH Stock Forecast page.
Business Operations and StrategyPrivate Placements and Financing
Suburban Propane Announces $350M Senior Notes Offering
Positive
Dec 8, 2025
On December 8, 2025, Suburban Propane Partners, L.P. announced its intention to offer $350 million in senior notes due 2035 through a private placement, subject to market conditions. The proceeds, along with borrowings from its revolving credit facility, are intended to redeem existing senior notes due 2027. This strategic financial move aims to manage the company’s debt obligations and reflects its ongoing commitment to financial stability and growth.
The most recent analyst rating on (SPH) stock is a Buy with a $22.00 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.