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Magellan Midstream Partners LP MMP

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Magellan Midstream Sees Stronger Volume Recovery in 2021, Expands Buyback Program

Stephen Ellis Sector Strategist

Analyst Note

| Stephen Ellis |

Magellan Midstream Partners' third-quarter results were good, and the partnership increased its 2021 distributable cash flow guidance by $30 million to $1.1 billion. The main driver of the better-than-expected performance was a stronger recovery in refined product volumes attributable to higher distillate and jet fuel demand and slightly lower gasoline demand than prior guidance. Overall distributable cash flow increased to $277 million from $259 million last year. Given the immaterial change in guidance and our anticipation of a stronger recovery in 2022 already, we expect to maintain our $52 fair value estimate and wide moat rating. Refined product volumes are now expected to increase about 4% compared with 2019 levels. 

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Company Profile

Business Description

Magellan Midstream Partners is a master limited partnership that operates pipelines and storage terminals in the Central and Eastern United States. Its assets transport, store, and distribute refined petroleum products and crude and earn a fee-based stream of cash flows. Assets include the country's longest petroleum pipeline network and several crude oil pipelines. Refined products make about 65% of operating margin, with the remainder mainly crude-oil pipelines.

Contact
One Williams Center, P.O. Box 22186
Tulsa, OK, 74121-2186
T +1 918 574-7000
Sector Energy
Industry Oil & Gas Midstream
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 1,720

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