2Q26 Preview - ET, KNTK, OKE, PAA/PAGP, and TRGP

Research evidence excerpt

2Q26 Preview - ET, KNTK, OKE, PAA/PAGP, and TRGP

ot Rated)

contributions being higher y/y, given their acquisitions, as well as stronger performance

in the Midstream segment as producer activity remains resilient and sees some relief

in the Permian with Waha relief. We hold that Energy Transfer's reported force majeure

at Nederland in late June will be impactful to neither 2Q nor 3Q given both timing and

the report noting ET told customers it was likely a matter of days. We expect timely in-

service of the first phase of Hugh Brinson, cemented by recent Platts data suggesting

initial volumes have started flowing on the asset, although we do not believe it is yet

fully operational. Based on ET's construction schedule, we estimate that the China Lake

Compressor Station, the pipeline's primary compressor unit for Hugh Brinson's header

system, is nearing or in its final stages of commissioning with expected completion next

month. The other main compressor station (Cisco Compressor Station) is expected for

completion between this month and November. Further, we recognize that Meta (META,

Buy, Youssef Squali) announced earlier this week an expansion of its Louisiana data

center to 5 GW; although ET has been named a supplier for the center's gas plants

previously, we are not modeling any incremental benefit at this time beyond what has

been publicly announced by ET.

2Q and outlook. We estimate $4.51Bn in Adjusted EBITDA for ET this quarter after

accommodating for one-time items in the prior quarter and allowing for seasonality

factors. We model '26 EBITDA of $18.52Bn with more support in 4Q as an attractive

entry point for '27, bolstered by the operational status of Hugh Brinson.

Kinetik Holdings Inc (KNTK) - Buy Rated, Maintain $53 PT

Updating 2Q26 estimates.