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Equitrans Midstream: There's More To Win Than To Lose, 50%+ Upside

DT Analysis profile picture
DT Analysis


  • Equitrans Midstream stands out for still offering significant growth prospects on the horizon in an industry that has largely axed capital expenditure.
  • When their trio of growth projects become operational in the coming two years, it stands to boost their adjusted EBITDA by upwards of 30%.
  • This should also boost their free cash flow significantly and thus allow their dividends to at least be doubled.
  • Based upon my Monte Carlo Simulations, investors only face a 16% downside even in a bearish scenario with zero growth but see over a 50% upside in a bullish scenario where their dividends double.
  • Since this means that there is more to win than to lose with favorably skewed results, I continue believing that my bullish rating is appropriate.

Businessman showing unbalance between reward and risk

AndreyPopov/iStock via Getty Images


Following the severe and now infamous downturn of 2020, the midstream industry is certainly no longer known for providing significant growth prospects with capital expenditure axed and projects deferred. Although this is where the Equitrans Midstream (

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DT Analysis profile picture
I am no longer active, as I am taking a hiatus from finance to pursue business ventures in other sectors.  I hope that my analysis was helpful to investors across the years, thank you.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (19)

Weather Man profile picture
Hey @Daniel Thurecht

Do you think they can maintain current dividend and deleverage with Mountain Valley DOA?
Weather Man profile picture
Hey Dan, your bearish case wasn't bearish enough.
Is there any argument the dividend is at risk if MVP isn't built? I am not aware of one. The share price seems to already anticipate negative value for MVP and the vast majority of the costs are sunk. It would appear to me the stock offers a free option on it getting back on track from the current price.
LIVING PROOF profile picture
Anyone else think the selling today after the adverse MVP ruling may have been overdone?

I decided to sell a small portion of my holdings (1300 shares @ $8.70) and then I sold 10 of the 2/18 $9 puts for $0.80 each. If I do nothing else with these, I either buy them back and make $.50/share or I've trimmed my position at effectively $9.50/share. My thought is I will probably have a chance to roll the puts in the future and continue to add to the trade.

I may do more tomorrow depending on how it behaves. Please share any thoughts or comments. Thanks.
john18 profile picture
The issue is, we will have to wait for another couple of years if all will go smoothly from now on to see this multi billion dollar pipeline completed.
Double the dividend, sounds good to me
when is mvp decision
LIVING PROOF profile picture
@gutcheck I believe the decision was made before they started construction. Thing is, any crazy court in the country can step in at any moment and hold it up. When you are at the mercy of activists on and off the court, well, who cares what's best for the country or who cares about the rule of law? Truth has become relative and subject to the whims of the latest headlines.
@LIVING PROOF They are not going thru farm fields, it's the tough parts now. They made mistakes, not ETRN but EQM whom they bought. Most people do care about the rule of law. My uncle held GM to the bitter end. Told him to sell at $93, 72, 55, 45, 35, 10 and again at 33 when Kikorian tried to buy it. He got nothing except 7 factories closed worth 2.50 a share and he refused to sell that which went broke too. I begged him to sell and buy fully growing profit companies with the proceeds, he did not. Too bad, the 3 I gave him to buy are worth 3x what that 55 dollar price is.
Well Stifel has said 16, but they suggested events that could change that and go far far higher like demand for Nat Gas burned for shut down coal plants. Word around has also been local factories building their own gas plants to complement the wind and solar they have. Even the heavy debt load could be mitigated by higher prices and pick up of business
After a Massive crash in the prior EQM and it's own stock ETRN it bottomed out. From the low viewpoint it was a buy buy buy and it is worth 22 a share with the MVP completion. But since that thought nat gas prices have soared and that has not to figure into the earnings.
Thx; go MVP!
TJ Roberts profile picture
I am bullish on ETRN. Even if MVP does not complete, you'd have about $700m freed up to their bottom line. But, if it does complete in summer 2022 like management states, then it will be a winner for sure. In my opinion, the tailwinds helping MVP are 1) the fact that the Colonial debacle showed how having a single pipeline source for ~50% of your gas was not a good idea, and 2) the plannedemic with the various State dictators like Newsom, Whitmer, Cuomo et al caused mass exoduses from their respective States, and the Southeast was the destination for many; as a Floridian, I have never seen so many Californians, New Yorkers, et cetera, in my State; it's almost like a mini-goldrush, but all these newcomers will need water, energy and so on, so MVP is a critical project for this part of the country. Furthermore, you get paid about 7% to wait for that project to complete.
@TJ Roberts OH ya, boomers make a move but that is going to slow as most retired.
@TJ Roberts Plannedemic was trump.....it will just wash out, like a miracle by May 2020, soon as temps warm up.......such a plan
LIVING PROOF profile picture
As a long-time holder of ETRN I've grown extremely jaded. There seems to be no end to the make believe obstacles dreamed up by misguided, or worse, opponents to gas pipelines.

Yet I hold tenuously. And I will continue to hold.
I own this stock, but I don't have much hope for any price appreciation. I will hold it as I am still underwater, but if it does move higher I will bail. Not a well managed company.
Kama4h profile picture
Well, the most important thing here is MVP project. If it's gonna be operational in next summer, the price could climb to more then 30 USD. If it's gonna be postponed again, we will see another 50% drop. The costs (interes payments) are starting to be a real burden.
Thanks for the analysis, been long this stock since 4th Q 2020, not a lot of coverage, but good performance since then.
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