MPLX LP (MPLX) Up 5.8% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for MPLX LP (MPLX). Shares have added about 5.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is MPLX LP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

MPLX Q2 Earnings Meet Estimates, Revenues Beat

MPLX reported second-quarter earnings of 66 cents per unit, in line with the Zacks Consensus Estimate. The bottom line improved from the year-ago quarter’s earnings of 58 cents.

Total quarterly revenues of $2,395 million beat the Zacks Consensus Estimate of $2,160 million. The top line increased from second-quarter 2020 sales of $2,081 million.

The strong quarterly results can be attributed to increased contributions from logistics and storage operations as well as the gathering and processing business.

Segmental Highlights

MPLX’s adjusted EBITDA from the Logistics and Storage segment increased from $839 million a year ago to $947 million. Higher revenues and lower operating expenses aided the segment.

Adjusted EBITDA from the Gathering and Processing segment was recorded at $427 million, up from $388 million in the prior-year quarter. The segment benefitted from higher natural gas liquids’ prices and lower operating expenses, partially offset by lower gathered and processed volumes.

Costs and Expenses

For second-quarter 2021, total costs and expenses were recorded at $1,464 million, up from the year-ago quarter’s $1,203 million. Expenses related to operations increased to $663 million from $435 million in the prior-year quarter.

Cash Flow

Distributable cash flow attributable to MPLX in second-quarter 2021 was $1,250 million, providing 1.73X distribution coverage, up from $1,027 million in the year-ago quarter. Distribution per unit was 68.75 cents for the reported quarter, flat with the year-ago quarter.

Net cash flow from operating activities for the quarter under review increased to $1,365 million from $1,105 million recorded in the corresponding period of 2020.

Balance Sheet

As of Jun 30, 2021, the partnership’s cash and cash equivalents were $8 million. Its total long-term debt amounted to $19.7 billion, while debt to capitalization was 60.7%.

Outlook

For 2021, the partnership expects capital spending of at least $100 million, lower than the previously mentioned $800 million. It expects to continue generating excess free cash flow, which will enhance its financial flexibility, including the ability to return incremental capital to unitholders.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, MPLX LP has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, MPLX LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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