Daily Brief Energy/Materials: Fosun International, Alcoa Inc, Enterprise Products Partners, Kinder Morgan, Pioneer Natural Resources and more

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Fosun International

• After a phase of some solid financial performances driven by rising aluminum prices, Alcoa delivered a disappointing result, failing to meet Wall Street expectations in terms of revenues as well as earnings.
• While the long-term fundamentals for the aluminum sector are still promising, Alcoa’s stock has been on a downward trajectory given the high volatility in the European energy markets causing losses to their two units in Europe.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Enterprise Products Partners’ results are approaching and the company had delivered an all-around beat in the last quarter.
• Its strong financial performance was primarily driven by higher margins in the octane enhancement business of the company, contributions from Midland Basin assets that it acquired recently, and higher natural gas dispensation margins.
• Enterprise Products Partners has recently announced an expansion of footprints of three organic growth projects for supporting the ongoing production development in the basin.

• Kinder Morgan delivered astonishing results.
• Due to high summer power demand, which resulted in an additional 880 million dekatherms of gas traveling to power plants per day, deliveries to power plants were strong in the quarter, increasing by roughly 11%.
• In addition, Kinder Morgan acquired North American Natural Resources and its sister companies, North American Biofuels and North American-Central, for $135 million during the quarter.

• Pioneer Natural Resources’ stock has been climbing as its results are approaching.
• Pioneer, along with ConocoPhillips and Devon, join OGMP2.0 with a commitment to increased transparency and leading Methane Performance in Emissions Reporting.
• Overall, we provide the stock of Pioneer Natural Resources with an ‘Underperform’ rating and a revision in the target price.