Week Thoughts: In Line, Down Bad

Midstream earnings, capex creep, big M&A

Mixed earnings led to mixed trading action across midstream this week. Commodity prices dropped, putting pressure on energy stocks, and midstream followed. The broad stock market was positive on the week. Midstream continues to fall behind the S&P 500, which is up more than 20% in the last 12 months.

With a rough earnings season and summer of underperformance behind us, midstream will put on a brave face as conference season kicks off with the Las Vegas conference this week. Midstream management teams can focus on swelling backlogs of high-return projects, still solid balance sheets, stable near-term fundamentals, and less frothy valuations after the summer washout.