Enterprise Products' Q1 Benefits From Commodity Price Tailwinds and Petrochemical Volumes

Enterprise Products Partners' first-quarter results were good, as the firm benefited from its recent leaning into commodity price tailwinds with the acquisition of Navitas Midstream. Based on these results, we do not expect to change our fair value estimate or wide moat rating. Higher commodity prices and margins in gathering and processing showed the most strength year over year, helped by a modest contribution from the Navitas deal, which was completed Feb. 17, nearly offset by a drop in natural gas pipeline earnings due to the absence of winter storm Uri contributions. We think the timing of the Navitas deal was excellent, as we expect very healthy near-term oil and gas prices, a key factor driving results, which should augur well for the returns on Enterprise’s $3.25 billion investment. Petrochemicals were also strong, with higher sales volumes, pricing, and reduced downtime the primary factors. Overall, adjusted EBITDA of $2.3 billion increased slightly from last year’s levels.