GENESIS ENERGY LP (GEL): what the price requires

At today's price, GENESIS ENERGY LP (GEL) is priced for -0.3% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/GEL

Headline

FieldValue
TickerGEL
CompanyGENESIS ENERGY LP
Current price$14.66/sh
CompositionOffshore Pipeline Transportation 33% / Marine Transportation 20% / Onshore Transportation and Services 48%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed8.0%
Operating margin today15.0%
Margin compression implied-7.0pp
Implied growth-0.3%
Multiple paid20x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.1pp (computed at the 7% minimum rate; the CAPM rate 4.4% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~16%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.09σ
cohort percentile (of 45 peers)67
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple; earnings-power/growth-DCF land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset—0—
Earnings2.93x1expensive
Relative0.43x3justifies
Growth1.85x2expensive

Families that justify the price: Relative Families that call it expensive: Earnings, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.5%); the inversion above states its own rate.

Per-Model Detail (n=6)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noFCF base $0.2B, growth -10% (input: historical growth), terminal g 0.5%, WACC 6.5%, 5yr projection
DCF Exit MultipleGrowth$12.241.20xyesExit EV/EBITDA: 7.1x / 9.1x / 11.1x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$34.270.43xyesP/S fallback (negative EPS): Sector P/S 2.5x × TTM revenue — excluded from consensus
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset——no—
Two-Stage Excess ReturnAsset——no—
Discounted Future Market CapGrowth$5.842.51xyesRev $1.7B, growth -15% (input: historical growth; tapered), Terminal P/S: 0.9x / 1.1x / 1.2x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$0.00—noNegative/zero EPS — earnings-based value floored at $0
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$5.002.93xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.25B × (1−1%) / WACC 6.5% → EPV (no growth)
Residual IncomeAsset——no—
Graham NumberAsset——no—
EV/EBITDA RelativeRelative$27.760.53xyesEBITDA $0.55B × sector EV/EBITDA 12.0x
FCF YieldEarnings$0.011465.50xyesFCF $178.4M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.011465.50xyesSBC-adj FCF $0.17B (FCF $0.18B − SBC $0.01B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings——no—
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$34.270.43xyesRevenue $1.68B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings——no—
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$3.2b
Net debt / NOPAT (after-tax)13.03x
Net debt / operating income (pre-tax)12.95x
Share count CAGR (dilution)0.0%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

Midstream energy partnerships are valued differently from ordinary companies, and Genesis Energy is a textbook case of why. The right lens is not trailing earnings, which the partnership structure and heavy depreciation distort, but the cash the assets throw off and the trajectory of the segment margins. On that basis the picture is improving sharply. Q1 2026 segment margin rose 29% to $156.4 million and adjusted EBITDA reached $140.9 million, with net income attributable to Genesis swinging to $6.8 million from a $469.1 million loss a year earlier, helped by stronger offshore pipeline volumes and sharply lower overhead.

The asset base is the kind that is hard to replicate. Genesis owns offshore crude-oil and natural-gas pipelines in the deepwater Gulf, marine transportation vessels, and onshore transportation and services. The 10-K explains that the offshore pipelines exist so that producers' production can access the markets (FY2025 10-K, accession 0001022321-26-000008), infrastructure that deepwater operators depend on and that carries long-lived, contracted volume economics. Deepwater fields take years to develop and then produce for decades, which gives the pipelines a multi-year tail of fee-based throughput.

The story now is deleveraging and simplification. After divesting its soda-ash business, Genesis has been cutting leverage and reducing its preferred-equity burden, the steps that move value from creditors and preferred holders toward common unitholders. Management expects full-year adjusted EBITDA near the prior midpoint despite some near-term softness at the Shenandoah development. For an investor comfortable with midstream partnership economics, a deleveraging owner of deepwater Gulf infrastructure trading well below its cash-flow-based methods is the setup the bull case rests on.

Bear Case

The qualitative problem comes first: Genesis is a leveraged, complex partnership whose fortunes are tied to a single deepwater basin and a handful of producer customers, and the gap between its $14.50 price and its cash-flow-based valuations exists for reasons, not by oversight. The offshore pipelines depend on a small number of large Gulf producers continuing to develop and produce fields on schedule. When a project slips, as management flagged with lower near-term Shenandoah volumes costing roughly $12 million to $15 million of segment margin in 2026, the revenue does not simply defer; it exposes how concentrated and timing-dependent the throughput really is. A business this reliant on a few customers' capital decisions carries fragility that the headline EBITDA recovery does not erase.

The balance sheet is the second hard fact. Net debt sits near $3.2 billion against trailing operating income of about $313 million, roughly 10x, an elevated load even by midstream standards. The deleveraging story is real, but it is a slow grind, and a partnership carrying that much debt has little room for a volume disappointment or a refinancing at higher rates. The earnings-power frame, which capitalizes normalized operating income at no growth, lands near $0.87, a stark signal that on a no-growth basis the equity is worth almost nothing after the debt and preferred claims, the partnership has to grow into its capital structure for the common to be worth the price.

The numbers underline the qualitative caution. Q1 2026 reported EPS of negative $0.06, missing the $0.16 estimate, and the marine segment carries dry-docking and timing effects that make quarterly cash flow lumpy. The commodity and demand cycle sits on top of all of it: a sustained drop in Gulf production economics, whether from lower oil prices or slower deepwater development, would cut throughput on the very pipelines the valuation depends on. A complex, levered partnership with customer concentration, a soft near-term volume outlook, and an earnings-power value near zero is cheap on the cash-flow methods precisely because the equity sits behind a large debt and preferred stack with real timing and commodity risk.

Valuation

Genesis is a midstream partnership, so the inversion and several models are distorted by the structure: negative book equity, heavy depreciation, and the preferred stack make the asset-based and earnings-based frames unreliable, and the engine notes the price is justified by relative-multiple and growth-DCF while earnings-power says expensive. Inverting the $14.50 price implies essentially flat operating-income growth (about negative 0.4%) with a price-implied margin near 7.8% against a current margin near 18.6%, a conservative read that the market is already discounting the cash-flow profile.

The usable model X-ray is thin but consistent. The perpetual-growth DCF lands near $24, the exit-multiple DCF near $14 right at the price, the relative and P/S-sector methods near $34, and the EV/EBITDA-relative method near $28. The blended landing across applicable methods is near $24. Against those, the earnings-power frame collapses to near $0.87 and the FCF-yield frames to near zero, both because the partnership's reported earnings and free cash flow, after the heavy depreciation and the debt-and-preferred burden, leave little for the common on a no-growth basis. Those readings should be treated as a warning about the capital structure rather than a literal value.

The characterization is that the cash-flow and relative frames support a value above the price while the earnings-power frame says expensive, a reflection of how much sits between the assets and the common unitholder. The peer set the model returned, UPS and FDX, is logistics rather than a clean midstream comparable, so peer multiples carry little weight; Genesis is better judged against its EBITDA, its leverage path, and the deepwater Gulf throughput outlook. The investable question is whether the deleveraging and EBITDA recovery proceed fast enough to move value to the common before a volume or commodity disappointment intervenes. At roughly 10x net-debt-to-operating-income, the balance sheet is the binding variable, and the gap to the cash-flow methods is the reward for taking that structural risk.

Catalysts

Genesis Energy reported Q1 2026 on April 30, with revenue of $446.6 million, segment margin up 29% to $156.4 million, adjusted EBITDA of $140.9 million, and net income attributable to Genesis of $6.8 million (versus a $469.1 million loss a year earlier), though reported EPS of negative $0.06 missed the $0.16 estimate. Management cited timing and dry-docking effects and lower near-term Shenandoah volumes (roughly $12 million to $15 million less segment margin in 2026), and still expects full-year adjusted EBITDA near the prior midpoint. The next print is expected July 30.

The central catalysts are deleveraging and offshore volume ramps. The data points to watch are the leverage trajectory and any further reduction in the preferred-equity burden, since those move value toward common unitholders, and the offshore pipeline throughput as deepwater developments come online. The Shenandoah timing and broader Gulf production economics are the swing factors on near-term segment margin. Oil prices and deepwater development pace are the macro variables that govern the fee-based throughput the valuation depends on, and any refinancing of the debt stack at prevailing rates is a key item given the leverage.

Sources: Genesis Energy Q1 2026 results (StockTitan, MarketBeat, stockanalysis.com, 2026); FY2025 10-K (accession 0001022321-26-000008).

Peer Cohorts (Per Segment, With Filing Citations)

Offshore Pipeline Transportation / Marine Transportation / Onshore Transportation and Services (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive GEL report on boothcheck