Stifel moved DT Midstream (NYSE:DTM) from Buy to Hold on Tuesday, even as the firm increased its 12-month price target to $137 from $121. The decision reflects a tension between confidence in DT Midstream’s growth profile and concern about current market pricing.
In its note, Stifel said the company’s fourth-quarter 2025 results were broadly in line with expectations and that management guided 2026 EBITDA to $1.19 billion at the midpoint. The firm pointed to a solid organic backlog for DT Midstream that is concentrated in natural gas pipeline projects, which Stifel described as carrying attractive returns.
Management continues to expect utility load to expand as electricity demand grows. Stifel highlighted that a portion of this electricity demand is being driven by data centers, and that DT Midstream prefers to be paid by utilities - operating "in front of the meter" - where the counterparty credit quality is stronger.
Despite these positives, Stifel said valuation concerns motivated the rating change. The analyst team observed the stock is trading at greater than 14 times its 2027 EBITDA estimate and noted the share price sits near its 52-week high. At the time of the note, the stock was trading at $137.91, close to a 52-week peak of $138.31, and carried a price-to-earnings ratio of 32.06.
Stifel’s view on valuation is consistent with InvestingPro analysis cited in the firm’s commentary, which indicates DT Midstream appears overvalued relative to its Fair Value. The stock has risen 37.6% over the last six months, a run that underpins the valuation question Stifel raised. The firm’s updated $137 price target is aligned with the market.
DT Midstream’s reported fourth-quarter 2025 financial metrics showed a mixed performance. The company posted earnings per share of $1.08, which missed the $1.17 consensus by 7.69%. Revenue, however, came in at $322 million versus an expected $317.54 million, a 1.4% beat.
Those results create competing narratives for investors: the EPS shortfall has drawn attention and concern, while the revenue outperformance offers some offset. Stifel’s note and the company’s guidance leave market participants watching how DT Midstream translates backlog and utility exposure into future earnings and cash flow.
Analysts and investors are expected to continue scrutinizing the company’s trajectory and valuation in the coming weeks as the financial community monitors how the mixed results and the firm’s guidance play out.
Summary
Stifel downgraded DT Midstream to Hold from Buy while raising its price target to $137. The firm praised the company’s backlog and utility exposure but said the stock’s valuation, trading above 14 times 2027 EBITDA and near its 52-week high, justified a lower rating. DT Midstream reported mixed Q4 2025 results with an EPS miss and a small revenue beat, and guided 2026 EBITDA to $1.19 billion at the midpoint.
Key points
- Stifel lowered its rating to Hold but raised the price target to $137 from $121 - reflecting valuation pressure despite positive growth indicators. - Sectors impacted: Energy infrastructure, Utilities, Capital markets.
- Company guided 2026 EBITDA to $1.19 billion at the midpoint and has an organic backlog weighted to natural gas pipelines with attractive returns. - Sectors impacted: Midstream pipelines, Natural gas.
- Q4 2025 results were mixed: EPS of $1.08 missed the $1.17 forecast (a 7.69% shortfall) while revenue of $322 million beat estimates of $317.54 million by 1.4%.
Risks and uncertainties
- Valuation risk - the stock is trading above 14 times 2027 EBITDA and near its 52-week high, which could limit upside or increase downside if multiples compress. - Markets affected: Equities, Energy sector.
- Earnings sensitivity - the recent EPS miss highlights the potential for earnings volatility to weigh on sentiment. - Markets affected: Investors and sell-side coverage of energy names.
- Demand assumptions - DT Midstream’s outlook relies in part on growing electricity demand, including data center-driven load; if that demand trajectory changes, utility-related revenue expectations could be affected. - Sectors affected: Utilities, Data center infrastructure.