Wolfe Research has raised its rating on DT Midstream to Outperform from Peer Perform, citing the company’s expanding project pipeline and attractive valuation as key drivers for the upgrade. The firm set a price target of $145.00 per share, implying roughly 14% upside from the stock’s closing price of $126.74 on Tuesday.
DT Midstream, which operates natural gas and NGL infrastructure assets, reported a market capitalization of $12.93 billion. The company’s shares have gained 27.5% over the past year, though Wolfe Research noted recent underperformance as a potential entry opportunity given the stock’s valuation metrics. InvestingPro data indicated the Relative Strength Index (RSI) placed DT Midstream in oversold territory at the time of the upgrade.
Second-quarter financial results showed adjusted EBITDA of $305 million, a slight decline of $3 million from the prior quarter. The decline was attributed to seasonally lower revenue from joint venture pipelines, while higher volumes in the Blue Union system contributed an $11 million gain in the collection segment. Growth capital expenditures for the quarter totaled $86 million, while the pipeline segment declined by $14 million due to reduced joint venture revenue.
Wolfe Research highlighted approximately $300 million in new organic projects that have reached final investment decisions, positioning DT Midstream for one of the highest growth rates in the sector. The firm emphasized the company’s exposure to long-term, 20-year utility service contracts, which underpin its growth outlook. DT Midstream’s assets are strategically located to meet rising electric power demand in the American Midwest and benefit from LNG-driven growth in the Haynesville region.
The upgrade follows the company’s reaffirmation of its full-year outlook and early 2027 projections during its second-quarter earnings release. Wolfe Research expects the expanding contract base to support a gradual reduction in DT Midstream’s valuation multiple, while an improving business mix is anticipated to attract additional investor interest.
