Sustainability of the earnings boost
The 3QâŻ2025 earnings jump from $0.02 to $0.05 per share is almost entirely a âMVPâaddâon.â RGCâs core upstream and midâstream operations have not shown comparable organic growth, so the incremental profit is tied to the Mountain Valley Pipeline (MVP) partnership. MVP earnings are vulnerable to three key externalities: (1)âŻregulatory and permitting riskâany federal or state injunction can halt flow and defer revenue; (2)âŻenvironmentalâlegal challengesârecent pipeline protests have already delayed other U.S. projects and could compress MVPâs cashâgeneration schedule; and (3)âŻcommodityâprice exposureâMVPâs fee structure is volumeâbased, so a dip in naturalâgas or NGL demand will directly shrink the contribution. Until the pipeline reaches a stable, longâterm operating profile, the earnings uplift is not repeatable on a quarterâtoâquarter basis.
Trading implications
On the technical side, RGCO has been trading near its 50âday SMA (~$4.20) with a modest upside bias; the 3âmonth chart still shows a broadâbased uptrend but volume has been light, suggesting the recent price move is more newsâdriven than momentumâdriven. The lack of a clear breakout above the recent high (~$4.55) and the proximity to the 200âday SMA (~$3.90) imply limited upside unless the MVP story turns into a sustained cashâflow narrative.
Actionable view
- Shortâtoâmidâterm: Treat the stock as a âplay on MVP.â If you are already long, tighten stops around $3.80â$4.00 to protect against a potential regulatory setback or a commodityâprice pullâback.
- Longâterm positioning: Consider a smaller, discretionary exposure (e.g., 5â10âŻ% of portfolio) with a view to add on on a pullâback if MVP earnings materialize in subsequent quarters and the company demonstrates diversification of its revenue base. Keep a close watch on pipelineârelated news releases, FERC filings, and naturalâgas demand trendsâany negative development could quickly erode the earnings premium.