Dassault Aviation
AM
$20.64
+3.61%
Antero Midstream Corporation is a midstream energy company that owns, operates, and develops gathering pipelines, compressor stations, and water handling systems serving Antero Resources' production and completion activity in the Appalachian Basin across West Virginia and Ohio, operating through Gathering & Processing and Water Handling segments. The company is a captive, fee-based midstream provider whose fortunes are tightly linked to a single anchor customer, giving it a distinct low-risk, contracted cash-flow identity rather than a commodity-exposed or merchant model. The current investor narrative centers on capital efficiency and shareholder returns, with management highlighting roughly 20% ROIC and approximately 11% projected free cash flow growth alongside a dividend yield above 5%, which frames the stock as an income and capital-return story. Debate now hinges on whether that free cash flow growth can be sustained against a leveraged balance sheet and a recent multi-month share price pullback that has lagged the broader market.…
AM
Dassault Aviation
$20.64
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Investment Opinion: Should I buy AM Today?
Rating: Hold with a constructive income bias. The core thesis is that AM is a high-margin, fee-based midstream operator yielding 5.16% with analyst targets averaging $24.00 (+16.3% upside) and a forward PE of 12.80x that looks reasonable if consensus EPS of $2.01 is delivered, but a 106.26% payout ratio and 1.634x debt-to-equity cap the upside until free cash flow coverage is proven. The seven-analyst cohort has a uniformly above-market target range of $22.00-$26.00, anchoring a favorable but not euphoric view.
Supporting evidence is strong on quality: gross margin of 65.30%, operating margin of 51.20%, net margin of 32.81%, ROE of 20.95%, and ROA of 7.61% all point to an efficient, contracted asset base, while management cites roughly 20% ROIC and 11% projected FCF growth. The forward PE of 12.80x versus trailing 20.69x implies meaningful earnings normalization, and the 5.16% yield provides a tangible return while waiting. The implied +16.3% upside to the $24.00 average target, with even the $22.00 low target above the current price, suggests limited downside according to the covering analysts.
The biggest risks that could invalidate the thesis are a free cash flow shortfall that forces a dividend cut (payout ratio 106.26%), a slowdown in Antero Resources' drilling activity that reduces gathering volumes, and multiple compression given the PEG of 5.72. This Hold would upgrade to Buy if free cash flow coverage of the distribution is confirmed and the forward PE holds below 13x, or downgrade to Sell if the payout ratio rises further or revenue estimates of $1.752 billion are revised lower. On valuation, the stock looks fairly valued to modestly undervalued on forward earnings but rich on a PEG basis, so the verdict is fairly valued with an income tilt.
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AM 12-Month Price Forecast
AM presents a balanced risk/reward: the forward PE of 12.80x and 5.16% yield are attractive if consensus EPS of $2.01 and 11% FCF growth are achieved, but the 106.26% payout ratio and 1.634x debt-to-equity mean the distribution is not yet self-evidently safe. Analyst targets are uniformly above the current price, with a $24.00 average implying +16.3% upside, yet the PEG of 5.72 and PS of 6.75x suggest the market is not underpricing growth. The recent -8.63% three-month move and -11.32% relative underperformance have improved the entry point but also reflect real concerns about cash conversion. I would upgrade to bullish if free cash flow coverage of the dividend is confirmed above 1.0x and Antero Resources signals higher activity, and downgrade to bearish if the payout ratio rises further or the $19.92 support breaks.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Dassault Aviation's 12-month outlook, with a consensus price target around $24.00 and implied upside of +16.3% versus the current price.
Average Target
$24.00
0 analysts
Implied Upside
+16.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$22 - $26
Analyst target range
Seven analysts cover Antero Midstream, with an average target price of $24.00 against the current price of $20.64, implying roughly +16.3% upside. The consensus recommendation field is listed as "none," so a formal Buy/Hold/Sell distribution is not available, but the average target sitting above the current price and above the 52-week high of $23.835 suggests the covering cohort leans constructive. Consensus EPS estimates of $2.01 and revenue estimates of approximately $1.752 billion underpin that optimism.
The target range spans $22.00 to $26.00, a spread of about 18% around the $24.00 average, which signals moderate rather than high conviction. The high target of $26.00 implies roughly +26% upside and would require multiple expansion toward the upper end of the stock's range plus delivery on the projected 11% FCF growth and continued capital-return execution; the low target of $22.00 still implies about +6.6% upside and likely assumes only modest multiple support with stable cash flows. The relatively tight range and uniformly above-market targets indicate analysts see limited downside, though the absence of a formal recommendation distribution and of institutional ratings history limits visibility into whether sentiment is improving or deteriorating.
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Bulls vs Bears: AM Investment Factors
The bull case rests on a high-margin, fee-based midstream model with a 5.16% yield, 20.95% ROE, and analyst targets implying +16.3% upside, while the bear case centers on a 106.26% payout ratio, 1.634x debt-to-equity leverage, a PEG of 5.72, and single-customer concentration. On balance, the evidence currently favors the bulls modestly: profitability is robust, the forward PE of 12.80x is undemanding if consensus EPS of $2.01 materializes, and every analyst target sits above the current price. The single most important tension is whether free cash flow growth of roughly 11% can sustain a distribution that exceeds earnings; if cash conversion holds, the yield and forward multiple make the stock attractive, but if FCF growth stalls, the dividend and the 20.69x trailing multiple both come under pressure. Recent price action (-8.63% over three months) suggests the market is already discounting some of this risk, which improves the risk/reward for patient income investors.
Bullish
- Analyst targets imply 16% upside: Seven analysts cover AM with an average target of $24.00 versus the $20.64 current price, a +16.3% implied return. Even the low target of $22.00 sits above the current price (+6.6%), and the high of $26.00 implies +26%, indicating a uniformly constructive covering cohort.
- Forward PE compression signals earnings growth: The trailing PE of 20.69x collapses to a forward PE of 12.80x, a roughly 38% compression that implies the market expects EPS to normalize toward the $2.01 consensus estimate. If delivered, the stock trades at a modest multiple for a business with 32.81% net margins.
- High-margin, fee-based cash flow machine: Gross margin of 65.30%, operating margin of 51.20%, and net margin of 32.81% reflect the fixed-cost, contracted nature of gathering and water handling. ROE of 20.95% and ROA of 7.61% confirm efficient capital deployment, and management cites roughly 20% ROIC.
- 5.16% dividend yield with FCF growth: The 5.16% dividend yield is well above the market average and is supported by management's projection of approximately 11% free cash flow growth. A payout ratio of 106.26% is a watch item, but fee-based cash flow rather than accounting earnings funds the distribution.
Bearish
- Payout ratio exceeds 100% of earnings: The 106.26% payout ratio means distributions currently exceed accounting earnings, so dividend durability depends entirely on free cash flow coverage. Any shortfall in cash conversion or a decline in Antero Resources' drilling activity would put the 5.16% yield at risk.
- PEG of 5.72 flags rich growth valuation: A PEG ratio of 5.72 indicates the market is paying a steep price relative to expected growth, even though the forward PE of 12.80x looks cheap in isolation. PS of 6.75x and EV/EBITDA of 12.32x are not bargain multiples for a mature midstream operator.
- Leverage constrains financial flexibility: Debt-to-equity of 1.634x is meaningful for a midstream infrastructure company, and with a payout ratio above 100%, the balance sheet has limited room to absorb a cash flow shock. The current ratio of 3.41 provides short-term liquidity but does not offset the structural leverage.
- Single-customer concentration risk: AM's gathering and processing and water handling assets are dedicated almost entirely to Antero Resources' Appalachian production. A slowdown in Antero's drilling program, a change in its completion cadence, or a contract renegotiation would directly hit volumes and revenue.
AM Technical Analysis
Antero Midstream is in a choppy, range-bound consolidation rather than a clean trend, with a 1-year price change of +14.92% that has modestly trailed the S&P 500's +15.53% over the same span. At the current price of $20.64, the stock sits roughly 86.6% of the way through its 52-week range of $16.96 to $23.835, meaning it is closer to the highs than the lows but has surrendered meaningful ground from the peak. That positioning suggests neither a momentum breakout nor a falling-knife setup, but rather a stock digesting gains after a strong run.
Short-term momentum has clearly decelerated and now diverges from the longer-term uptrend: the 1-month change is -2.46% and the 3-month change is -8.63%, both sharply negative against a positive 1-year return. Relative strength confirms the underperformance, with 1-month relative strength of -3.68% and 3-month relative strength of -11.32% versus SPY, though the 6-month change of -3.05% is less severe than the 3-month figure, hinting the decline is recent rather than chronic. The most recent session showed a sharp +3.61% bounce off the prior close of $19.92 to $20.64, a potential short-term reversal signal, but volume of 4.10 million shares and a short ratio of 4.89 days suggest lingering bearish positioning that could fuel either a squeeze or further pressure.
Key technical levels are defined by the 52-week low of $16.96 as major support and the 52-week high of $23.835 as overhead resistance, with the recent October low near $19.92 acting as an intermediate floor. A breakout above $23.835 would signal resumption of the longer-term uptrend and likely invite momentum buyers, while a breakdown below $19.92 would put the $16.96 support in play and confirm the 3-month downtrend. With a beta of 0.694, the stock is roughly 31% less volatile than the market, which supports larger position sizing for risk-adjusted exposure but also means it will likely lag in strong risk-on rallies; the max drawdown of -15.59% underscores a relatively contained downside profile.
Beta
0.69
0.69x market volatility
Max Drawdown
-15.6%
Largest decline past year
52-Week Range
$17-$24
Price range past year
Annual Return
+14.9%
Cumulative gain past year
| Period | AM Return | S&P 500 |
|---|---|---|
| 1m | -2.5% | +0.2% |
| 3m | -8.6% | +2.9% |
| 6m | -3.1% | +8.4% |
| 1y | +14.9% | +14.9% |
| ytd | +15.1% | +11.9% |
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AM Fundamental Analysis
Revenue trajectory data is not available in the provided inputs, as quarterly financials, income statement, and revenue segment breakdowns are all empty, so the multi-quarter growth trend cannot be quantified directly. What can be inferred is that consensus estimates point to average revenue of approximately $1.752 billion (range of $1.680 billion to $1.813 billion) and average EPS of $2.01 (range of $1.90 to $2.10), implying a stable, fee-based top line anchored to Antero Resources' production volumes. The Q4 2025 earnings commentary referencing 11% projected FCF growth suggests modest but positive expansion rather than acceleration, consistent with a mature midstream gathering model where growth is tied to customer drilling activity rather than price.
Profitability is robust for a midstream operator, with a net margin of 32.81%, gross margin of 65.30%, and operating margin of 51.20%, reflecting the high fixed-cost, fee-based nature of gathering and water handling assets. Net income is positive, evidenced by a trailing EPS of $0.0486 on a per-share basis alongside the far larger consensus forward EPS estimate of $2.01, and ROE of 20.95% and ROA of 7.61% confirm efficient capital deployment. The payout ratio of 106.26% against a dividend yield of 5.16% is a key watch item, as it signals distributions currently exceed earnings and depend on free cash flow coverage rather than accounting profit.
Balance sheet health is mixed: debt-to-equity of 1.634x indicates meaningful leverage typical of midstream infrastructure, but a current ratio of 3.41 reflects strong short-term liquidity. Free cash flow and cash flow statement data are not available in the provided inputs, so internal funding capacity cannot be verified directly, though the 20% ROIC cited in earnings commentary and 11% projected FCF growth suggest the business can largely self-fund. The elevated leverage combined with a payout ratio above 100% means the dividend's durability rests on sustained free cash flow, making cash conversion the single most important metric to monitor.
Quarterly Revenue
N/A
N/A
Revenue YoY Growth
N/A
YoY Comparison
Gross Margin
N/A
Latest Quarter
Free Cash Flow
N/A
Last 12 Months
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Valuation Analysis: Is AM Overvalued?
Because net income is positive, the PE ratio is the primary metric: the stock trades at a trailing PE of 20.69x versus a forward PE of 12.80x, a roughly 38% compression that implies the market expects meaningful earnings growth ahead. That gap is consistent with the consensus EPS estimate of $2.01 against the very low trailing EPS figure, suggesting the forward multiple reflects a normalized earnings base rather than near-term deterioration.
Relative to sector context, the stock's PS ratio of 6.75x and EV/EBITDA of 12.32x sit alongside a PEG ratio of 5.72, which flags the valuation as rich relative to its growth rate even though the forward PE of 12.80x looks inexpensive in absolute terms. The 5.16% dividend yield and 32.81% net margin provide income and quality support that can justify a premium, but the PEG of 5.72 suggests the market is paying up for growth that consensus does not expect to be rapid. Peer industry average multiples are not available in the provided valuation data, so a precise premium or discount spread cannot be quantified.
Historical ratio data is empty, so the current PE of 20.69x and PS of 6.75x cannot be positioned within the stock's own historical band. Absent that context, the most telling internal signal is the wide trailing-to-forward PE gap, which indicates the market is pricing in an earnings recovery or normalization; if that materializes, the stock looks reasonably valued, but if forward estimates slip, the trailing multiple of 20.69x offers limited cushion.
PE
20.7x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on the distribution's coverage and the balance sheet. The payout ratio of 106.26% means the 5.16% dividend yield is not covered by accounting earnings, so its durability depends on free cash flow that is not directly verifiable in the provided data. Debt-to-equity of 1.634x is elevated for a midstream operator, and while the current ratio of 3.41 shows strong short-term liquidity, the combination of leverage and an over-100% payout leaves little cushion if cash conversion deteriorates. Revenue is also concentrated: the Gathering & Processing segment supplies the majority of revenue and is tied to a single anchor customer, Antero Resources, so a slowdown in that customer's drilling or completion activity would flow directly into volumes and fees.
Market and competitive risks include valuation compression and relative underperformance. The PEG ratio of 5.72 and PS of 6.75x suggest the stock is priced for growth that consensus does not expect to be rapid, and the EV/EBITDA of 12.32x is not a distressed multiple. With a beta of 0.694, AM is roughly 31% less volatile than the market, which cushions broad selloffs but also means it will lag in risk-on rallies; the 3-month relative strength of -11.32% versus SPY shows this dynamic already at work. Midstream gathering is a regulated, contract-driven business with limited pricing power, and any adverse regulatory change in the Appalachian Basin or a shift in Antero Resources' development plan would be a direct competitive threat.
The worst-case scenario is a simultaneous FCF shortfall and customer slowdown: Antero Resources cuts drilling activity, gathering volumes fall, free cash flow growth stalls below the projected 11%, and management is forced to either cut the 5.16% distribution or fund it with incremental debt at 1.634x debt-to-equity. In that chain, the forward PE of 12.80x would prove illusory as EPS estimates of $2.01 are revised down, and the stock could retest its 52-week low of $16.96, roughly -17.8% from the current $20.64. A more severe outcome toward the analyst low target of $22.00 is actually above the current price, so the realistic downside is defined by the 52-week low and the -15.59% max drawdown, implying an investor could lose roughly 16-18% in an adverse scenario.
FAQ
The most severe risk is distribution coverage: the 106.26% payout ratio means the 5.16% yield exceeds earnings, so a free cash flow shortfall could force a dividend cut. Second is customer concentration, since AM's gathering and water assets are dedicated almost entirely to Antero Resources, and a reduction in that customer's drilling activity would directly cut volumes. Third is balance-sheet leverage at 1.634x debt-to-equity, which limits flexibility if cash flow turns negative. Fourth is valuation compression, with a PEG of 5.72 and PS of 6.75x leaving room for multiple contraction, as reflected in the -8.63% three-month price decline and -11.32% relative underperformance versus SPY.
The 12-month outlook has three scenarios: a 25% bull case targeting $24.00-$26.00 if 11% FCF growth materializes and the payout ratio falls below 100%; a 55% base case targeting $22.00-$24.00 on stable fee-based cash flows and delivery of $2.01 consensus EPS; and a 20% bear case targeting $16.96-$19.92 if Antero Resources slows activity or the distribution comes under pressure. The base case is most likely, anchored by the $24.00 analyst average and a tight $22.00-$26.00 target range. The key assumption is that free cash flow continues to cover the distribution despite the 106.26% payout ratio.
The valuation is mixed. On forward earnings, the 12.80x PE is modest and implies roughly 38% compression from the 20.69x trailing multiple, suggesting the market expects earnings normalization toward $2.01 per share. On growth-adjusted terms, the PEG of 5.72 and PS of 6.75x indicate the stock is not cheap, and EV/EBITDA of 12.32x is a full multiple for a mature midstream operator. The 5.16% yield and 32.81% net margin justify some premium, but without peer or historical multiple data the most telling signal is the wide trailing-to-forward gap. The market appears to be pricing in an earnings recovery; if it materializes, the stock is fairly valued to modestly undervalued, but if estimates slip, the 20.69x trailing multiple offers limited cushion.
From a risk/reward perspective, AM offers +16.3% upside to the $24.00 analyst average target and a 5.16% dividend yield, with a forward PE of 12.80x that is undemanding if consensus EPS of $2.01 is delivered. The downside is anchored by the $22.00 low analyst target, which is still above the current $20.64 price, and by the 52-week low of $16.96, roughly -17.8% away. The biggest risk is the 106.26% payout ratio, which means the dividend depends on free cash flow rather than earnings. It is a good buy for income-oriented investors with a 12-month horizon who can tolerate single-customer concentration, but less compelling for growth investors given the PEG of 5.72.
AM is better suited to long-term income holding than short-term trading. The 5.16% dividend yield and fee-based, contracted cash flows reward patience, while the beta of 0.694 and max drawdown of -15.59% indicate low volatility that limits short-term trading opportunities. The recent 3-month decline of -8.63% and short ratio of 4.89 days show near-term momentum is negative, so traders face choppy range-bound action between $19.92 and $23.835. Earnings visibility is moderate, tied to Antero Resources' drilling program, which supports a minimum holding period of 12-18 months to capture the yield and allow the forward earnings normalization implied by the 12.80x forward PE to play out.