DT Midstream Inc "Takeaways from Non-Deal Road Show" (Buy) Gupta

Research evidence excerpt

DT Midstream Inc "Takeaways from Non-Deal Road Show" (Buy) Gupta

contract durations are extending, Q3E 1.15 1.18

further supporting earnings visibility. Q4E 1.17 1.22

12/26E 4.79 4.77

While the brownfield storage opportunities are there, management indicated that 12/27E 5.69 5.07

storage rates will have to rise further (double digits) to make green field storage 12/28E 6.31 5.59

projects economical.

Manav Gupta

While the opportunity set is vast, DTM will remain capital disciplined. Analyst

Management emphasized a preference for longer-tenor (15–20 year) contracts manav.gupta@ubs.com

with utilities, citing stronger credit profiles and greater revenue visibility relative to +1-212-713 4399

shorter-term (5–7 year) agreements with individual counterparties. Saumya Jain

Associate Analyst

At present, DTM sees more attractive returns in organic growth opportunities

saumya.jain@ubs.com

relative to large-scale M&A. +1-212-882 0089

DTM is targeting build multiples of ~5–8x across its project portfolio, with returns Sumantra Banerjee

dependent on factors such as contract duration, location, risk profile, and Associate Analyst

counterparty credit quality. sumantra.banerjee@ubs.com

+1-212-713 5104

While reiterating the strategic benefits of its late-2024 acquisition of three FERC-

regulated pipeline assets from ONEOK, management noted that transactions of

Highlights (US$m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 922 981 1,243 1,331 1,386 1,496 1,540 1,547

EBIT (UBS) 471 489 614 655 763 855 881 881

Net earnings (UBS) 384 354 441 492 585 648 674 681

EPS (UBS, diluted) (US$) 3.94 3.60 4.30 4.79 5.69 6.31 6.56 6.63

DPS (net) (US$) 2.81 2.94 3.28 3.46 3.70 3.88 4.07 4.23

Net (debt) / cash (3,174) (3,401) (3,270) (3,231) (3,245) (3,083) (2,861) (2,646)