UGI Corporation
UGI
$37.66
-1.31%
UGI Corporation is an American holding company that distributes and markets energy products and services through its subsidiaries, operating primarily in the regulated gas, propane distribution, and midstream & marketing sectors. As a diversified energy distributor with a significant international presence, UGI holds a strong position in the propane market through its AmeriGas and UGI International segments, while its Utilities segment provides stable, regulated cash flows. The current investor narrative centers on UGI's deleveraging plan, which involves strategic asset sales to reduce debt and enhance dividend stability, while the company refocuses on its core businesses to unlock value. Recent attention has also been drawn to the stock's recovery from a mid-2026 dip, with a notable uptick in August, reflecting optimism about the company's strategic direction and financial health.…
UGI
UGI Corporation
$37.66
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Investment Opinion: Should I buy UGI Today?
Based on the analysis, UGI is rated as a Buy. The stock offers a compelling valuation with a trailing P/E of 10.56x and a PEG ratio of 0.07x, indicating it is undervalued relative to its growth prospects. The analyst consensus is a Buy with an average target price of $41.33, implying an upside of 8.9% from the current price. The company's solid profitability, with a net margin of 9.30% and a gross margin of 49.86%, supports its ability to generate earnings. Additionally, the dividend yield of 4.50% provides income, and the deleveraging plan is expected to enhance financial stability.
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UGI 12-Month Price Forecast
The AI assessment leans bullish on UGI, driven by its attractive valuation metrics and the potential for successful deleveraging to enhance shareholder value. The low P/E and PEG ratios indicate that the market may be undervaluing the company's earnings growth prospects. Analyst sentiment is positive, with a consensus Buy and a target price above the current level. However, the high debt levels and weak relative strength versus the market temper confidence. If UGI executes its plan effectively and demonstrates improved financial metrics, the stock could re-rate higher. Conversely, any missteps could lead to downside. The stance would be upgraded to high confidence if the company shows tangible progress in debt reduction and margin improvement, and downgraded if the deleveraging plan stalls or earnings disappoint.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on UGI Corporation's 12-month outlook, with a consensus price target around $42.33 and implied upside of +12.4% versus the current price.
Average Target
$42.33
0 analysts
Implied Upside
+12.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$42 - $43
Analyst target range
The relatively narrow target range of $40.00 to $42.00 (a spread of $2.00) suggests a high level of conviction among analysts, with the high target of $42.00 implying a potential upside of 10.7% from the current price. The low target of $40.00 still represents a 5.4% upside, reflecting confidence in UGI's deleveraging plan and dividend stability. With no recent downgrades or upgrades reported, the stable analyst sentiment aligns with the company's strategic focus on debt reduction and core business optimization, which is expected to drive earnings growth and potentially narrow the valuation gap with peers.
Bulls vs Bears: UGI Investment Factors
UGI presents a mixed investment case. On the bullish side, the stock offers a compelling valuation with a low P/E and PEG ratio, solid profitability, and a high dividend yield supported by a deleveraging plan. Analysts are optimistic, with a consensus Buy and an average target price implying upside. However, bearish factors include a high debt-to-equity ratio, weak relative strength versus the market, and a low current ratio indicating liquidity risk. The most important tension is whether UGI's deleveraging and strategic refocusing will successfully reduce debt and improve operational efficiency, thereby justifying the current valuation and supporting dividend stability. If the plan succeeds, the stock could re-rate higher; if not, the high debt and margin pressures could weigh on performance. Currently, the evidence slightly favors the bull case given the attractive valuation and analyst confidence, but the risks warrant caution.
Bullish
- Attractive Valuation with Low PEG: UGI trades at a trailing P/E of 10.56x and a PEG ratio of 0.07x, indicating the stock is undervalued relative to its expected earnings growth. This low PEG suggests significant upside potential for value investors.
- Solid Profitability and Margins: UGI maintains a net margin of 9.30% and a gross margin of 49.86%, demonstrating efficient cost management and strong profitability in its operations. These margins are robust for the utilities sector.
- Analyst Consensus Buy with Upside: Analysts rate UGI as a 'Buy' with an average target price of $41.33, implying a 8.9% upside from the current price of $37.94. The narrow target range ($40-$42) reflects high conviction in the company's strategic direction.
- Deleveraging Plan Enhances Dividend Safety: UGI's strategic asset sales to reduce debt are expected to bolster dividend stability, as highlighted in recent news. The current dividend yield of 4.50% is attractive, and the payout ratio of 47.49% suggests sustainability.
Bearish
- High Debt-to-Equity Ratio: UGI's debt-to-equity ratio of 1.58 indicates a significant debt burden, which could strain financial flexibility and increase vulnerability to rising interest rates. This is a key risk despite deleveraging efforts.
- Weak Relative Strength vs Market: UGI's 1-year relative strength is -8.42% compared to the S&P 500, and its 6-month relative strength is -11.31%. This underperformance suggests the stock is lagging the broader market, which may persist.
- Operating Margin Compression: The operating margin of 15.19% shows some compression, likely due to increased operating expenses or competitive pressures in non-regulated segments. This could pressure future profitability if not addressed.
- Low Current Ratio Indicates Liquidity Risk: UGI's current ratio of 0.89 is below 1, indicating potential short-term liquidity concerns. This could limit the company's ability to meet short-term obligations without external financing.
UGI Technical Analysis
UGI's stock has exhibited a range-bound to recovery pattern over the past year, with a 1-year price change of +10.23%, indicating a modest uptrend. As of September 4, 2026, the stock trades at $37.94, which is approximately 91.8% of its 52-week range (from $31.62 low to $41.34 high), suggesting it is closer to the higher end of its yearly range, reflecting positive momentum but also potential overextension. The stock's beta of 0.956 indicates it is slightly less volatile than the broader market, providing a relatively stable investment profile.
Beta
0.96
0.96x market volatility
Max Drawdown
-20.4%
Largest decline past year
52-Week Range
$32-$41
Price range past year
Annual Return
+14.1%
Cumulative gain past year
| Period | UGI Return | S&P 500 |
|---|---|---|
| 1m | -2.3% | -1.0% |
| 3m | +11.4% | +2.0% |
| 6m | +6.5% | +17.4% |
| 1y | +14.1% | +15.0% |
| ytd | +0.1% | +11.7% |
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UGI Fundamental Analysis
UGI's revenue trajectory has been growing, with the most recent quarterly revenue estimated at $7.782 billion (annualized), reflecting a multi-quarter trend of steady expansion. The company's net margin of 9.30% indicates solid profitability, while its gross margin of 49.86% is robust for the utilities sector, suggesting efficient cost management. However, the operating margin of 15.19% shows some compression, likely due to increased operating expenses or competitive pressures in its non-regulated segments.
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 UGI Overvalued?
Given UGI's positive net income, the trailing P/E ratio of 10.56x is the primary valuation metric, which is notably lower than the forward P/E of 11.65x, implying that the market expects earnings to grow modestly in the coming year. The PEG ratio of 0.07x is extremely low, suggesting that the stock is undervalued relative to its expected earnings growth, which is a key attraction for value investors.
PE
10.6x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
8.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks for UGI are significant. The company's debt-to-equity ratio of 1.58 indicates a high leverage level, which could strain cash flows and limit financial flexibility, especially if interest rates rise. The current ratio of 0.89 suggests potential short-term liquidity issues, as current liabilities exceed current assets. While the net margin of 9.30% is healthy, the operating margin of 15.19% shows compression, possibly due to rising costs in its non-regulated segments. Additionally, the payout ratio of 47.49% indicates that a substantial portion of earnings is distributed as dividends, leaving less room for reinvestment or debt reduction if earnings decline.
FAQ
The key risks of holding UGI include: (1) high financial leverage with a debt-to-equity ratio of 1.58, which could strain cash flows and increase vulnerability to interest rate hikes; (2) operational risks such as margin compression, as seen in the operating margin of 15.19%, and a low current ratio of 0.89 indicating potential liquidity issues; (3) market risks, including the stock's underperformance relative to the S&P 500 over the past year; and (4) company-specific risks related to the execution of the deleveraging plan and potential dividend cuts. The most severe risk is a failure to reduce debt, which could lead to a downgrade and a decline to the 52-week low.
The 12-month forecast for UGI is moderately positive. In the base case (50% probability), the stock is expected to trade in the range of $40-$42, aligning with the analyst average target of $41.33. In the bull case (30% probability), the stock could reach $42-$45 if the deleveraging plan succeeds and earnings grow. In the bear case (20% probability), the stock could fall to $31.62-$35 if the plan fails or market conditions deteriorate. The most likely scenario is the base case, assuming the company continues to execute its strategy and maintains dividend stability.
UGI appears undervalued based on its trailing P/E of 10.56x, which is lower than the market average, and its PEG ratio of 0.07x, indicating that the stock is cheap relative to its expected earnings growth. The price-to-sales ratio of 0.98x and price-to-book ratio of 1.50x also suggest a reasonable valuation. Compared to its own history, the stock is trading near the higher end of its 52-week range, but the earnings multiple remains attractive. The market seems to be pricing in modest growth, but the low PEG suggests potential upside if the company delivers on its strategic plan.
UGI appears to be a good buy for value and income investors, given its low P/E of 10.56x and high dividend yield of 4.50%. Analyst consensus is a Buy with an average target price of $41.33, implying an 8.9% upside from the current price. However, the high debt-to-equity ratio of 1.58 and weak relative strength versus the market are risks. The stock is suitable for investors with a medium to long-term horizon who are comfortable with some volatility and are attracted to the potential for capital appreciation and dividend income.
UGI is more suitable for long-term investment due to its stable utility operations, high dividend yield, and potential for value appreciation as the company deleverages. The stock's beta of 0.956 indicates lower volatility, making it a relatively stable holding. However, the current low P/E and PEG ratios suggest that the market may not fully recognize the company's growth potential, which could take time to materialize. A minimum holding period of 3-5 years is recommended to allow the strategic plan to unfold and for the stock to re-rate. Short-term trading may be less attractive due to the stock's moderate volatility and the lack of immediate catalysts.