DTM: Guardian Expansion Will Shape Cash Flows Amid Regulatory And Execution Risks

Analysts have raised their price target on DT Midstream from $120.23 to $121.92, citing a modestly improved long term profit outlook and the positive implications of a successful open season for the Guardian expansion.

Analyst Commentary

Bullish analysts view the latest price target increase as confirmation that DT Midstream's valuation can expand alongside improved earnings visibility, particularly as contracted volumes from the Guardian expansion support steadier cash flows.

While most recent research leans positive, some commentary still highlights execution and regulatory risks that could temper upside if project timelines or returns fall short of expectations.

Bullish Takeaways

• Bullish analysts see the higher price target as reflecting stronger long term cash flow growth, supported by secured commitments from the Guardian expansion.
• The successful open season is viewed as a de risking event, improving confidence in project execution and supporting a premium relative valuation to peers.
• Incremental contracted capacity is expected to enhance earnings visibility, which bullish analysts believe supports continued dividend growth and balance sheet strength.
• Improved throughput expectations on core assets underpin forecasts for above sector average EBITDA growth, justifying a higher implied multiple.

Bearish Takeaways

• Bearish analysts caution that the stock already prices in a substantial portion of the Guardian driven upside, limiting near term multiple expansion.
• There is lingering concern that cost inflation or permitting delays on expansion projects could compress returns versus current bullish forecasts.
• Some commentary notes that DT Midstream remains sensitive to broader macro and commodity demand trends, which could slow volume growth and pressure valuation.
• Investors are also reminded that concentration in a few large projects elevates execution risk, and any setback could lead to target cuts or underperformance.

What’s in the News

• Closed a successful binding open season on Guardian Pipeline, awarding 328,103 Dth per day of new expansion capacity to five shippers, with a targeted in-service date of November 1, 2028 (Key Developments).
• Combined with capacity awarded in July 2025, Guardian expansion now totals 536,903 Dth per day, representing about a 40% increase over the pipeline's current capacity (Key Developments).
• Expanded Guardian capacity is expected to support long-term volume growth and enhance DT Midstream's contracted cash flow profile as the project advances toward in service (Key Developments).

Valuation Changes

• Fair Value Estimate has risen slightly from $120.23 to $121.92 per share, implying a modest increase in the modeled long term intrinsic value.
• Discount Rate is effectively unchanged, edging down marginally from 6.96 percent to 6.96 percent, signaling a stable risk assessment for DT Midstream's cash flows.
• Revenue Growth Assumption is essentially flat, moving fractionally from 10.06 percent to 10.06 percent, indicating no meaningful change in top line expectations.
• Net Profit Margin has increased slightly from 36.11 percent to 36.14 percent, reflecting a small improvement in anticipated profitability on future revenues.
• Future P/E Multiple has risen modestly from 26.52x to 26.88x, pointing to a slightly higher valuation being assigned to forward earnings.