UGI (UGI) Down 14.8% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for UGI (UGI). Shares have lost about 14.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is UGI due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

UGI Corp's Q1 Earnings Beat Estimates, Revenues Miss

UGI Corporation delivered first-quarter fiscal 2020 adjusted earnings $1.17 per share, which beat the Zacks Consensus Estimate of $1.02 by 14.7%. The bottom line increased 44.4% from the prior-year quarter’s figure of 81 cents.

The company generated GAAP earnings of $1 in the reported quarter compared with the year-ago quarter’s GAAP earnings of 36 cents.

Revenues

Revenues of $2,006.6 million in the quarter missed the Zacks Consensus Estimate of $2,111 million by 4.9%. The top line declined 8.7% from the year-ago quarter’s figure of $2,200.2 million.

Segment Revenues

AmeriGas Propane: The segment generated revenues of $730.4 million in the quarter under review, down 11% from year-ago quarter’s tally.

UGI International: This segment generated revenues of $651.4 million, down 8.3% from year-ago quarter’s figure.

Midstream & Marketing: This segment generated revenues of $372.5 million in the quarter under review, down 19% from year-ago quarter’s figure

UGI Utilities: This segment generated revenues of $329.3 million in the quarter under review, up from year-ago quarter’s reported figure of $322.7 million.

Corporate & Other: This segment incurred a loss of $77 million narrower than a loss of $112.8 million incurred in fiscal first-quarter 2019.

Operational Highlights

Despite weather that was 10.3% warmer than normal and 2.7% warmer than the prior-year period, LPG retail volume increased 3.7% year over year or 246.4 million gallons reflecting strong bulk volumes associated with crop drying.

Total interest expenses amounted to $84.1 million, up 39.7% from the prior-year quarter’s tally.

On October 11, 2019, Gas Utility's new base rates went into effect. In the quarter under review, Auburn IV expansion completed and placed into service on Nov 1.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -7.92% due to these changes.

VGM Scores

Currently, UGI has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, UGI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.