The case for & against
Bull & Bear analysis
Bullish
NGL Energy Partners LP (NYSE: NGL) operates primarily within the logistics, disposal, and water solutions sectors, focusing on the management and disposal of produced water generated by oil and gas operations. With a strategic pivot towards enhancing profitability through water solutions, NGL aims to capitalize on increasing demand in this segment. The company is now prioritizing a structured growth strategy supported by operational efficiency and capital structure improvements, positioning itself amidst a favorable market backdrop.
Bull says
- ↑FY26 adjusted EBITDA of $660M; FY27 growth target +10%.
- ↑Q4 EBITDA $176M vs $149M YoY; water segment EBITDA $603M.
- ↑750k bbl/day newly contracted volumes underpin revenue stability.
- ↑Repurchased 8.7M units at $5.72; redeeming high-cost preferred lowers leverage.
- ↑Operates at lowest cost per barrel in water logistics sector.
- ↑High earnings yield and strong momentum factors support valuation.
Bear says
- ↓85% of EBITDA tied to water solutions heightens concentration risk.
- ↓Crude price volatility threatens logistics revenue and water volumes.
- ↓Leverage near 4x with ongoing CAPEX needs risks liquidity under stress.
- ↓Regulatory delays and stricter disposal rules may slow project ramp-up.
- ↓Intensifying competition and consolidation could erode service margins.
- ↓Weaker profitability factors and low institutional interest limit valuation.
Earnings Call · Q4 2025 · Mgmt. Guidance
Updated 05-29-2026bullish
Transcript signals
Bull points
- In February 2024, we began paying off the dividend arrearages on all three classes of our outstanding preferred units, requiring three months and $475 million to complete this effort, such that we are now and have been current on our preferred equity financial obligations.
- We entered into a five-year, 200,000-barrel per day MVC contract that allowed us to construct the LEX II water pipeline. This pipeline was placed into service in November of 2024, contributing five months activity to fiscal 2025. We now have two large diameter pipelines with total capacity expandable to 500,000 barrels per day, taking water east into Andrews County.
- In the fiscal year 2025 just ended, we achieved both record water disposal volumes and adjusted EBITDA. Through the first two months of this quarter, we are exceeding, as Brad said, the total water disposal volumes projected in our 2026 guidance.
Bear points
- During that time, we have experienced significant volatility and somewhat disappointing results in several of our liquid logistics businesses.
- Near term, we don't see, you know, commune distribution. We're happy to start attacking these class Ds, so that'll be our focus. And at the same time, trying to reduce leverage. We'd like to get that under four times. So... I wouldn't be looking for a distribution increase in the next few quarters, no, or reinstatement.
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