In today’s briefing:
- S&P/ASX Index Rebalance Preview: Potential Changes from Now to September
- [Iron Options Weekly 2024/28] Supply/Demand Outlook for Iron Ore Outweighs Stimulus Hopes
- Matador Resources Company: Enhanced Production and Resource Optimization A Critical Growth Catalyst? – Major Drivers
- Cemex: The Promising Credit Story of a Regional Leader in the Cement Industry
- DT Midstream Inc.: Emerging Opportunities in Carbon Capture and Sequestration! – Major Drivers
- Fortescue Metals Group (FMG AU): High Dividend Yield of 9%, What to Expect From Q4 FY24
- Kinetik Holdings Inc.: Strategic Market Positioning Through PHP Capacity! – Major Drivers
- Murphy Oil Corporation: Exploration and Expansion of Portfolio & Other Major Drivers
- Noble Corporation Plc: Exploration & Production Contract Renewals & Other Major Drivers
- PBF Energy Inc.: Adaptation to Market Conditions and Regulatory Environment! – Major Drivers
S&P/ASX Index Rebalance Preview: Potential Changes from Now to September
- With nearly 80% of the review period complete, there could be 28 adds/deletes across the S&P/ASX family of indices in September.
- There is a lot of stocks for passive trackers to trade on the index changes with the largest impacts on the potential changes to the S&P/ASX 200 (AS51 INDEX).
- The potential adds have outperformed the potential deletions by a LOT over the last few months and continued positioning could lead to further gains.
[Iron Options Weekly 2024/28] Supply/Demand Outlook for Iron Ore Outweighs Stimulus Hopes
- Following the iron ore rally at the start of the month, prices have corrected sharply lower owing to downbeat economic data and an inventory buildup.
- Option activity over the past week was notably skewed towards put options suggesting a negative sentiment. Weekly options volume was sharply lower WoW.
- Recent bearish sentiment has been accompanied by a decline in IV. Outcome from the plenary meeting is likely to reignite volatility in the coming weeks.
Matador Resources Company: Enhanced Production and Resource Optimization A Critical Growth Catalyst? – Major Drivers
- Matador Resources Company has reported a promising start to the first quarter of 2024, with significant advancements in operational and financial aspects.
- The company has successfully enhanced its infrastructure, expanded financial capacities, and is preparing for substantial well completions, indicating a robust growth trajectory.
- From an operational perspective, Matador Resources has effectively integrated a significant pipeline system totaling 595 miles.
Cemex: The Promising Credit Story of a Regional Leader in the Cement Industry
- We are initiating coverage on Cemex with a preference for CX 5.20% 2030 bonds.
- Cemex’s business position, favorable market trends within its key markets, commitment to further strengthening its credit profile, and credit-positive strategic priorities support our optimistic view on the name.
- For EM investors, we prefer CX 5.20% 2030, considering these bonds are trading wide to the Mexican Sovereign, the EM BBB Index, and the LatAm BBB Index.
DT Midstream Inc.: Emerging Opportunities in Carbon Capture and Sequestration! – Major Drivers
- DT Midstream reported a positive start to the first quarter of 2024, underpinned by advancements in strategic growth projects and stable financial metrics.
- The highlights from the results include an adjusted EBITDA of $245 million, marking an increase of $6 million from the previous quarter.
- These figures were attributed to a robust performance in the gathering segment and consistent results in the pipeline segment.
Fortescue Metals Group (FMG AU): High Dividend Yield of 9%, What to Expect From Q4 FY24
- Fortescue Metals (FMG AU) trades at a steady dividend yield of 9%, assuming a 115 USD/ton iron ore price and an 80% payout.
- The payout risk lies in incremental capex spend on green energy in future years. For FY24, the company has committed USD 500 mn (overall capex 3.0-3.2 bn USD).
- We expect shipments of ~54 million tons for Q4 FY24 (in its production report to be released on 25th July) and 192 million tons for FY24 (flat YoY).
Kinetik Holdings Inc.: Strategic Market Positioning Through PHP Capacity! – Major Drivers
- Kinetik reported a strong start to the year, surpassing its own internal expectations and signaling robust growth prospects for 2024.
- In Q1, Kinetik recorded an adjusted EBITDA of $234 million, marking a 25% increase year-over-year.
- This positive performance was primarily driven by volume growth, leveraging contributions from the Permian Highway Pipeline (PHP) expansion, and the Delaware Link.
Murphy Oil Corporation: Exploration and Expansion of Portfolio & Other Major Drivers
- Murphy Oil Corporation displayed a mixed performance in its first quarter of 2024, with several areas of strength along with areas requiring attentiveness.
- The company achieved a production output of 170,000 barrels of oil equivalent per day, operating at the upper end of its anticipated range.
- This was primarily driven by higher production in Eagle Ford Shale and Tupper Montney.
Noble Corporation Plc: Exploration & Production Contract Renewals & Other Major Drivers
- Noble Corporation’s first quarter 2024 results reflect both strengths and areas of concern as they position themselves in a changing market landscape.
- One of the key highlights from the quarterly review includes an adjusted EBITDA of $183 million, illustrating a 32% increase on a year-over year basis.
- This growth primarily stemmed from solid operational uptime and a slight bump in marketed utilization.
PBF Energy Inc.: Adaptation to Market Conditions and Regulatory Environment! – Major Drivers
- PBF Energy recently presented updates on its operational and financial performance for the first quarter of 2024, along with insights into future strategy adjustments.
- Reflecting a mixed performance during this period, the results demonstrate both challenges and strengths in PBF Energy’s operations.
- From a financial standpoint, PBF Energy reported adjusted net income of $0.85 per share and adjusted EBITDA of $301.5 million.
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