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Tuesday's Energy Stocks: TerraForm jumps 34.7% on merger close, midstream drags


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Essential IR Insights Newsletter - February 2023

Tuesday's Energy Stocks: TerraForm jumps 34.7% on merger close, midstream drags

Broader indexes closed the Tuesday, Oct. 17, session on a high note, with most energy-sector benchmarks leaning the same direction.

The Dow Jones Industrial Average hiked 0.18% to close at 22,997.44, inching closer to achieving the 23,000-milestone. The S&P 500 added 0.07% to finish at 2,559.36, and the SNL Energy Index increased 0.17% to end the session at 291.32.

Independent power producers had a profitable day, with the SNL Merchant Generator Index ending the session 0.08% above the breakeven at 101.46, helped by TerraForm Power Inc. stock skyrocketing.

TerraForm, one of the largest renewable power producers, saw its stock price surge 34.72% to reach $12.96 per share on more than four times the average volume after closing its merger with Brookfield Renewable Partners LP. Brookfield purchased a 51% interest in TerraForm, adding more than 2,600 MW of renewable sources to its portfolio. Brookfield stock moved in a profitable range, up 0.48% to C$43.72 on the Toronto Stock Exchange, on active volume.

Among other major independent power producers, Atlantica Yield plc grew 1.76% to close at $21.42 on high volume and Pattern Energy Group Inc. added 1.15% to finish a slow session at $24.53.

Other IPPs, however, moved downward on Tuesday. Dynegy Inc. lost 3.77% per share value to settle an active session at $9.44, NRG Energy Inc. stock decreased 2.33% in value to close at $26.00 on above-average volume and NextEra Energy Partners finished its brisk session 1.64% down to $42.68.

After several days of steep declines, PG&E Corp. reversed course on Tuesday, gaining 7.51% to close at $57.44, again on extremely high volume, more than eight times the daily average. The SNL Electric Company Index hiked 0.55% to reach 493.21. Portland General Electric Co. stock spiked 1.63% to finish at $45.50 on more than double the average volume. Wells Fargo Securities maintained a "market perform" rating on the company. PNM Resources Inc. shares increased 0.98% in value to close its active session at $41.35.

The midstream sector did not fare well on Tuesday, with the SNL Midstream Energy Index losing 0.51% to close at 110.57.

Most large midstream entities like EQT GP Holdings LP, SemGroup Corp., NGL Energy Partners LP, QEP Resources Inc. and Buckeye Partners LP ended in the red. EQT GP shed 3.30% per share to settle at $28.73 on average volume. SemGroup closed 2.87% down to $27.10 on below-average volume. NGL Energy lost 2.58% per unit to finish at $11.35 on light volume. QEP stock shrank 2.60% to end light trading at $8.62, and Buckeye stock decreased 1.84% in value to finish its active session at $54.03.

EQT Corp. units, meanwhile, gained 1.21% to wrap up the session at $63.32, and Plains GP Holdings LP shares advanced 0.99% to finish at $21.48, both on below-average volume.

The SNL Coal Index grew 1.36% to close at 65.58, with major companies like Arch Coal Inc., Warrior Met Coal Inc. and CONSOL Energy Inc. capitalizing on optimal trading conditions. Arch Coal added 2.29% to its share price, reaching $72.87 on above-average volume; Warrior Met Coal stock grew 2.17% to $24.04 on about triple the average volume; and CONSOL Energy shares added 1.74% to finish at $15.83 on light volume.

Early gains to a $3.026/MMBtu intraday high proved unsustainable, as NYMEX November natural gas futures slipped to a settlement just 1.6 cents higher at $2.962/MMBtu.

Market prices and index values are current as of the time of publication and are subject to change.