Genesis Energy, L.P. (GEL), a diversified midstream energy operator, declared the pricing of its previously announced public offering of 4,000,000 common units. Priced at $50.71 per common unit, the offering is expected to close on Sep 26.
Further, the partnership has granted underwriters a 30-day option to buy an additional 600,000 common units. Genesis Energy intends to use the proceeds from the unit offering to fund organic growth projects or to repay debts under its revolving credit facility.
However, the offering was not well received by investors. The partnership’s stock price fell over 4% on the day to close at $50.75.
Headquartered in Houston, TX, Genesis Energy conducts operations in three segments, namely, Pipeline Transportation Division, Refinery Services Division and Supply and Logistics Division. The partnership has a diverse portfolio of customers, operations and assets. Moreover, Genesis Energy has robust cash distribution that also works in its favor.
However, on the earnings front, the partnership’s performance has been consistently poor. Genesis Energy failed to meet the Zacks Consensus Estimate in all the trailing four quarters with an average negative surprise of 29.89%. Downward estimate revisions for both the current quarter and current year are indicative of further bearishness on the stock. The current quarter estimate stands at 32 cents per unit, whereas the current year estimate is pegged at $1.26 per unit.
Currently, Genesis Energy carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. market in the next one to three months.
Meanwhile, one can consider better-ranked players from the broader energy sector like Spectra Energy Partners, LP (SEP), Alon USA Partners, LP (ALDW) and Sunoco Logistics Partners L.P. (SXL). All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment