Citi Upgrades DT Midstream (DTM) to Buy

Citi analyst Spiro Dounis upgraded DT Midstream (NYSE: DTM) from Neutral to Buy with a price target of $115.00 (from $90.00).

The analyst comments: "We upgrade DTM to Buy from Neutral following the recently announced $1.2bln acquisition of 3 FERC-regulated pipelines which we believe distinguishes the company and starts DTM on a path to expanding its investor base. Following the transaction, DTM’s Pipeline segment will grow to 70% of the overall business – a premium segment that’s contribution is now significantly higher than natgas peers. Additionally, DTM is now >$10bln in market cap, which should attract attention from a wider investor base, including international investors. We estimate the deal was ~4% accretive to DCF/sh and ~8% accretive to EBITDA/sh. We expect this acquisition to support DTM’s top-quartile dividend growth rate and view this recent deal as a blueprint to continue to increase the company’s size, which should close the peer valuation gap. At current 11.5x ’26 EBITDA, DTM still trades at a ~0.5x discount to peers, which creates a compelling value opportunity, in our view."

For an analyst ratings summary and ratings history on DT Midstream click here. For more ratings news on DT Midstream click here.

Shares of DT Midstream closed at $102.73 yesterday.

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