NGL

Did the company provide any guidance or outlook for the remainder of FY2026, and how does that affect our valuation models?

Created August 07, 2025 at 08:37 PM

Short answer:

The excerpt you provided does not contain any explicit forward‑looking guidance or outlook for the remainder of FY 2026. Consequently, we cannot directly plug a company‑issued target (e.g., FY‑2026 revenue, EBITDA, cash flow, or capital‑expenditure guidance) into our valuation models.

Below is a detailed discussion of what this omission means for the three most common valuation frameworks we use (DCF, relative‑multiple, and scenario‑based models) and a practical roadmap for obtaining the missing information.

1. What the news snippet does tell us

Item	Detail (from the snippet)
Company	NGL Energy Partners LP (ticker NGL)
Event	Publication of First‑Quarter FY 2026 financial results
Source	Business Wire (press‑release style)
Date	7 August 2025 (UTC)
Category	Earnings

What is not mentioned (and therefore not available to us from this text):

FY 2026 full‑year guidance (revenue, EBITDA, net income, cash flow, etc.)
Management commentary on market conditions, commodity price outlook, or operational plans for Q2‑Q4 FY 2026
Capital‑expenditure, drilling, or acquisition targets for the balance of the year
Any revision to prior guidance (increase, decrease, or hold)

Because the snippet is a headline/metadata dump, the actual press‑release (or the accompanying earnings‑call transcript) would be the place where such forward‑looking statements typically reside.

2. How the absence of guidance impacts our valuation models

A. Discounted Cash Flow (DCF) Model

Impact	Explanation
Forecast Uncertainty	Without management‑provided FY‑2026 guidance, we must rely on historical growth rates, commodity price curves, and industry benchmarks to project Q2‑Q4 cash flows. This adds a subjective layer and widens the confidence interval of the DCF output.
Terminal Value Sensitivity	The terminal value is usually a multiple of FY‑2026 or FY‑2027 EBITDA. If we lack a clear EBITDA outlook, any terminal‑value assumption will be more volatile.
Risk‑adjusted Discount Rate	The lack of guidance is a qualitative risk factor that can justify a modest increase in the cost of capital (e.g., +15–30 bps to the WACC) to reflect greater earnings uncertainty.
Scenario Modeling	We should build multiple scenarios (base, upside, downside) anchored on commodity‑price forecasts (WTI, natural‑gas) and operational assumptions (drill‑per‑day, rig count). The variance among scenarios will be larger than usual.

B. Relative‑Multiple (Comps) Model

Impact	Explanation
Comparable Peer Multiples	In the absence of a forward‑looking earnings estimate, we rely on trailing multiples (e.g., EV/EBITDA‑TTM) and forward‑looking industry consensus estimates (e.g., from Bloomberg, FactSet). The lack of company‑specific guidance means we cannot fine‑tune a “company‑specific forward multiple” and must stay with broader peer averages.
Price Target Adjustments	Analyst price targets that incorporate NGL’s own guidance will be missing; we’ll have to use consensus analyst forecasts (if any) or our own internally generated forecasts. This may increase the valuation spread (high‑low range) across the peer set.

C. Scenario‑Based / Monte‑Carlo Models

Impact	Explanation
Input Distribution	We must assign probability distributions to the missing variables (e.g., Q2‑Q4 revenue growth, EBITDA margin). The variance of these distributions will be higher, leading to a wider Monte‑Carlo outcome band.
Stress‑Testing	The model can be used to test price‑shock scenarios (e.g., ±20 % WTI price swing) to see how the valuation reacts, compensating for the lack of explicit management guidance.

3. Practical steps to obtain the missing guidance

Step	Action	Rationale
1. Retrieve the full press release	Visit the Business Wire link, the NGL Investor Relations website, or the SEC’s Form 8‑K filing (usually filed the same day).	The full release will contain the “Management Outlook” section, which typically provides FY‑2026 guidance.
2. Listen to the earnings call transcript	Look for a webcast/recording (often posted on the IR site) or a transcript via Bloomberg/FactSet/Seeking Alpha.	Management may provide non‑numeric commentary (e.g., “we expect a “moderate” improvement in margins”) that can be quantified using historical translation rules.
3. Check analyst consensus	Use Bloomberg, Refinitiv, FactSet, or S&P Capital IQ to pull the consensus FY‑2026 EPS/EBITDA estimates and any “company guidance” tags.	If the company withheld guidance, analysts often extrapolate from Q1 results; those numbers become a proxy.
4. Review industry outlooks	Look at EIA commodity‑price outlook, IHS Markit drilling rig forecasts, and energy‑sector pipelines (e.g., pipeline utilization rates) for the second half of FY 2026.	Helps to build a bottom‑up projection in the absence of company‑specific numbers.
5. Update the model	Insert the guidance (or your derived proxy) into the revenue/EBITDA line items, re‑run the DCF, adjust multiples, and re‑run scenario analysis.	Ensures the valuation reflects the latest forward‑looking information.

4. How to treat the “no‑guidance” situation in our valuation right now

Temporary “Guidance‑Free” DCF
- Revenue – Project Q2‑Q4 using a quarter‑over‑quarter growth rate derived from Q1 results (e.g., if Q1 revenue was $X and grew 5 % YoY, apply a 4‑5 % QoQ growth assumption).
- EBITDA margin – Use the historical average margin for the past 4‑5 years (or the margin from the same quarter in FY 2025) as a baseline, then apply a ±100‑basis‑point sensitivity range.
- CapEx & Working‑Capital – Apply the average capex‑as‑% of revenue and working‑capital‑turnover ratios from the prior 2‑3 FYs.
Add a “Guidance‑Uncertainty Premium” to WACC
- Base WACC (e.g., 7.8 %).
- Add 20 bps for “lack of forward guidance” + any commodity‑price volatility premium (if oil & gas price forecasts are volatile).
Create a “Guidance Gap” sensitivity tab
- Show valuation impact if FY‑2026 EBITDA is +10 %, ‑10 %, ±20 % relative to the base case.
- Highlight the valuation range (e.g., $X‑$Y per share) to illustrate the materiality of the missing guidance.
Document the assumption set
- Clearly note that guidance is not disclosed as of 7 Aug 2025, and that the model relies on historical trends + macro‑inputs.
- Flag the model for review once the full press release or earnings‑call transcript is available.

5. Bottom‑line recommendation

Current status: No explicit FY 2026 guidance is present in the snippet.
Immediate impact: Valuation models must rely on historical performance and external market assumptions, which widens the range of possible outcomes and introduces a modest increase in risk premium.
Next steps: Obtain the full press release/earnings call to capture any guidance that may have been omitted from the headline. If, after reviewing the complete documentation, NGL still provides no forward outlook, adopt the “guidance‑free” modeling approach outlined above and track the valuation variance closely.

By following this workflow, we will keep our valuation process transparent, quantitatively disciplined, and ready to incorporate any guidance as soon as it becomes publicly available.