Equitrans Midstream (NYSE:ETRN) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Equitrans Midstream Corporation (NYSE:ETRN) is scheduled to report Q3 earnings results on November 3, 2020.

The company is expected to report earnings of $0.33/share on revenue of $367 million. The consensus earnings per share (EPS) of $0.33/share is based on a poll of 6 analysts and represents a decline in eps of −65.0% over the same quarter last year, when the company reported earnings of $0.94/share.

The revenue forecast of $367 million based on a poll of 6 analysts implies a year-over-year (YoY) decline in revenue of −10.2%. Last year the company reported $408.4 million in revenue for the quarter.

Expected to report EPS contraction of −65.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $366.97 $408.43 −10.2%
EPS $0.33 $0.94 −65.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 7 tracked quarters, and missed expectations 1 quarter.

What are your expectations from Equitrans Midstream Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.21 $0.22 3.4% Beat
Q1, 2020 $0.32 $0.46 42.4% Beat
Q4, 2019 $0.45 $1.24 174.4% Beat
Q3, 2019 $0.42 $0.94 123.3% Beat
Q2, 2019 $0.51 $0.64 25.0% Beat
Q1, 2019 $0.47 $0.25 −46.1% Missed
Q4, 2018 $0.34 $0.99 187.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 5.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $9.75 $10.30 5.6% Increase
May 14, 2020 $6.92 $7.72 11.6% Increase
February 27, 2020 $8.68 $7.06 −18.7% Decline
November 5, 2019 $14.50 $12.88 −11.2% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.19, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.19 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Equitrans Midstream Corporation is currently trading at $7.60/share, down −2.9% for the day. The company is trading at approximately 52.2% of its 52-week high of $14.65/share. The company’s stock price is down −26.2% since the last earnings report and down −6.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 34.80 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:ETRN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −13.79 and a forward P/E multiple of 6.89.

Equitrans Midstream Corporation’s current share price also implies a price-to-book (P/B) multiple of 1.06. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $7.60
P/E Ratio −13.8x
P/E Ratio (Fwd) 6.9x
PEG Ratio 0.1
Total Debt / Total Capital 61.5%
Levered Free Cash Flow $393.1 million
EV / EBITDA 6.6x

Finbox

Equitrans Midstream Corporation is a mid-cap stock with a market capitalization of $3.386 billion and a total enterprise value of $11.542 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.

Equitrans Midstream Corporation owns, operates, acquires, and develops natural gas gathering, transmission and storage, and water services assets in the Appalachian Basin. It operates through three segments: Gathering, Transmission, and Water. The Gathering System segment include 990 miles of high-pressure gathering lines with compression of approximately 445,000 horsepower and multiple interconnect points; and approximately 920 miles of Federal Energy Regulatory Commission (FERC) low-pressure gathering lines. Its Transmission and Storage System segment comprises 950 miles of FERC regulated interstate pipeline that connects to seven interstate pipelines and local distribution companies. The Water System segment include two independent systems comprised approximately 180 miles of pipeline that deliver fresh water from the Monongahela River, the Ohio River, local reservoirs, and various regional waterways. Equitrans Midstream Corporation was founded in 2018 and is headquartered in Canonsburg, Pennsylvania.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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