As of June 9, 2025, BP Midstream Partners LP's estimated intrinsic value ranges from $6.56 to $115.38 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $9.55 | -44.2% |
| Discounted Cash Flow (5Y) | $8.97 | -47.6% |
| Dividend Discount Model (Multi-Stage) | $37.00 | +116.2% |
| Dividend Discount Model (Stable) | $115.38 | +574.3% |
| Earnings Power Value | $6.56 | -61.6% |
Is BP Midstream Partners LP (BPMP) undervalued or overvalued?
With the current market price at $17.11, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate BP Midstream Partners LP's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.35 | 0.75 |
| Cost of equity | 5.2% | 8.6% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 0.26 | 0.26 |
| After-tax WACC | 4.7% | 7.5% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $9 | $1,271M | 89.1% |
| 10-Year Growth | $10 | $1,332M | 79.5% |
| 5-Year EBITDA | $3 | $676M | 79.4% |
| 10-Year EBITDA | $4 | $775M | 64.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $59M |
| Discount Rate (WACC) | 7.5% - 4.7% |
| Enterprise Value | $786M - $1,252M |
| Net Debt | $331M |
| Equity Value | $455M - $921M |
| Outstanding Shares | 105M |
| Fair Value | $4 - $9 |
| Selected Fair Value | $6.56 |
| Metric | Value |
|---|---|
| Market Capitalization | $1793M |
| Enterprise Value | $2124M |
| Trailing P/E | 11.79 |
| Forward P/E | 13.04 |
| Trailing EV/EBITDA | 7.10 |
| Current Dividend Yield | 838.68% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.26 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $2.86 |
| Discounted Cash Flow (5Y) | 25% | $2.24 |
| Dividend Discount Model (Multi-Stage) | 20% | $7.40 |
| Dividend Discount Model (Stable) | 15% | $17.31 |
| Earnings Power Value | 10% | $0.66 |
| Weighted Average | 100% | $30.47 |
Based on our comprehensive valuation analysis, BP Midstream Partners LP's weighted average intrinsic value is $30.47, which is approximately 78.1% above the current market price of $17.11.
Key investment considerations:
Given these factors, we believe BP Midstream Partners LP is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.