UGI: Initiating at Overweight, $46 PT

Research evidence excerpt

UGI: Initiating at Overweight, $46 PT

/EBITDA for Midstream,

is valued at 17.5x P/E, Midstream at International to 7.0x EV/EBITDA, and 3.0x EV/EBITDA for International, and

6.0x EV/EBITDA, International at 4.0x AmeriGas to 6.0x EV/EBITDA 0.0x for AmeriGas

EV/EBITDA, and AmeriGas at 3.0x EV/ • Tangible progress on midstream large- • The market continues to treat UGI as

EBITD load opportunities in PA a show me story, with slower utility

• This case assumes UGI delivers ~6.8% • We would also see upside if AmeriGas earnings realization, and little willingness

EPS CAGR through 2030, driven achieves its operating targets faster to assign recovery value to AmeriGas

by steady utility execution, modest than expected, further reducing the • We would also see downside if large-

midstream growth without major large- valuation discount the market has load oppty fails to materialize, leaving

load wins embedded, International historically applied to the portfolio Midstream with modest growth, rather

remaining a $200M+ FCF generator, than the more strategic platform we

and AmeriGas continuing to move from think it can become

negative value toward neutral in our

SOTP

Upcoming Catalysts Company Description

• UGI Utilities and Mountaineer gas rate cases UGI distributes, stores, transports, and markets energy primarily in

• Evidence of continued AmeriGas operational improvement, the U.S. and also Europe. In the U.S., the company operates a natural

including customer attrition, service levels, call center gas & electric distribution utility (UGI Utilities & Mountaineer), an

performance, and leverage reduction Energy Services unit with midstream and marketing primarily in the

• Large-load/data center updates across PA Eastern U.S., and a propane distribution company (AmeriGas). UGI