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Monday, October 19, 2020

Is Now the Time to Invest in DCP Midstream LP (NYSE:DCP)?

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DCP Midstream LP (DCP) shares are trading at lower $12.24 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $14.69.

To add more color to this target, the company’s high over the last year is $26.26 and the low is $2.20. Over the last 52 weeks, DCP is down -47.91% while the S&P 500 is up 18.31%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, DCP reported a profit of $530.0 million. DCP Midstream LP also saw revenues increase to $1.27 billion. In addition, DCP has free cash flow of $421.0 million as of 06-2020. The company’s EBITDA came in at $87.0 million which compares well with its peers.

DCP booked profit margins of -11.80%, its Return on Equity (ROE) is -14.00%, and its Return on Assets is -5.70%. All told, it is clear that, DCP needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. DCP has a short ratio of 4.35 and outstanding shares of 208.30M.

Company Outlook

DCP has seen increased volume after this news and investors are putting their support behind the value proposition. Traders will also note the company’s earnings per share came in at -4.22. DCP Midstream LP DCP also noted assets of $12.95 billion at the end of the last quarter. Investors should also keep an eye on sector updates as DCP has historically followed its peers on positive news.

All told, DCP Midstream LP DCP has strung together solid data and demonstrated underlying fundamentals. At its current valuation, DCP represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

DCP Midstream LP DCP is now commanding a market cap of 2.56B and a float of 89.76M. DCP is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of DCP stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in DCP, either long or short, and we have not been compensated for this article.

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