Magellan Midstream Partners L.P. Limited Partnership (MMP) Company Bio
Magellan Midstream Partners LP engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. It operates in three segments: Refined Products, Crude Oil, and Marine Storage. The company was founded in 2000 and is based in Tulsa, Oklahoma.
MMP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Magellan Midstream Partners LP with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Magellan Midstream Partners LP ranked in the 38th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 43%. In terms of the factors that were most noteworthy in this DCF analysis for MMP, they are:
Magellan Midstream Partners LP's weighted average cost of capital (WACC) is 8%; for context, that number is higher than just 6.44% of tickers in our DCF set.
Magellan Midstream Partners LP's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than merely 23.03% of US stocks with positive free cash flow.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than just 13.01% of stocks in its sector (Energy).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Energy that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as MMP, try CVX, NGS, NNA, RNET, and FGPRQ.
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Magellan Midstream Partners, L.P. (NYSE: MMP) plans to announce financial results for fourth quarter 2020 before the market opens on Tues., Feb. 2. Management will discuss fourth-quarter 2020 earnings and annual guidance for 2021 during a conference call with analysts at 1:30 p.m. Eastern the same day.