Beyond 2024: Examining Multi-Year Guidance for Midstream


  • Many midstream companies provide guidance for the year ahead, but a select group also offer EBITDA growth guidance or targets for the next few years.
  • Visibility to future EBITDA growth provides important context for dividend growth.
  • Midstream’s ability to generate consistent EBITDA growth regardless of the commodity price backdrop is a distinctive advantage relative to the rest of the energy space.

With fourth quarter earnings season under way, midstream/MLP investors are largely focused on company outlooks for 2024, which tend to accompany results. While 2024 guidance continues to trickle in, it bears highlighting that multiple companies in the midstream space provide multi-year outlooks – a unique advantage of midstream within the broader energy space. Today’s note looks at some of the midstream corporations and MLPs that have provided multi-year guidance and why this is important for investors.

Longer-Term Outlooks Point to Moderate EBITDA Growth.

Many midstream companies provide EBITDA guidance for the year ahead, but a select group also offers guidance or targets for the next few years. This provides helpful visibility for investors and sets expectations for management to then execute against. It also underscores the predictability of cash flows provided by fee-based businesses operating under long-term contracts.

Typically, companies with a long-term growth target for adjusted EBITDA will acknowledge that year-to-year changes can be lumpy due to project timing. For example, Williams (WMB) has guided to long-term adjusted EBITDA growth of 5-7%, but management is anticipating a more pronounced step-change for 2025 given expected project startups (read more). Note that WMB is holding its analyst day tomorrow.