Raymond James downgraded Enterprise Products Partners L.P. (NYSE:EPD) to Outperform from Strong Buy on January 5. The firm maintained its price target at $36. This adjustment is part of a broader reset in the midstream supplier group as it moves into 2026.
The firm noted that the midstream sector is entering 2026 with momentum. After what it called "constructive" share performance in 2025, expectations are now higher. Raymond James stated, "the real work now shifts to execution." Investors are increasingly focused on which companies can convert supportive macroeconomic conditions into actual cash flow, rather than relying on strong narratives alone.
Enterprise Products Partners stands out in terms of cash flow. The partnership generates steady, predictable cash that supports a large distribution. Over the past 12 months, its distributable cash flow covered the distribution by 1.7 times. This cushion is sought by income-focused investors, as it provides room to absorb volatility before the payout faces pressure.
The company's balance sheet adds stability. It has an investment-grade credit profile, offering flexibility if markets tighten or operations encounter short-term challenges. This financial strength allows it to avoid tough choices like cutting its distribution. Enterprise has increased its distribution for 27 consecutive years, a record that includes difficult periods such as two major energy sector downturns, the Great Recession, and the COVID-19 shock.
Enterprise Products Partners L.P. is a midstream energy services provider. It handles transportation, processing, storage, and related services for natural gas, NGLs, crude oil, refined products, and petrochemicals across the value chain.