economy
“Outsized upside” could be around the corner for these dividend-paying energy plays, Morgan Stanley says
Select midstream equity plays could see considerable upside, according to the firm.
TL;DR
- De-escalation of the Iran conflict has led to lower oil prices, but potential multi-year inventory rebuilding could support higher mid-cycle crude oil prices.
- Morgan Stanley believes select midstream stocks offer significant upside potential, including attractive dividend yields.
- Targa Resources is highlighted for its balance sheet remediation, free cash flow generation supporting dividend growth and share repurchases, and a price target suggesting 26% upside.
- Oneok is recognized for its positioning to capitalize on rig efficiencies and growth in the Permian Basin following its acquisition of Medallion, with a price target implying 29% upside.
- WaterBridge Infrastructure is noted for its high EBITDA growth potential within the midstream sector, with a price target suggesting 18% upside.