Our $31 TP is based on our NPV methodology and assumes an 11% cost of equity and 12% cap rate and implies a ~9.0x 2026E EV/EBITDA multiple.

While there’s minimal direct commodity exposure and fleets have generally been high-graded to better withstand downcycles, we view a prolonged commodity downturn as the key risk to our thesis. A weaker production outlook, particularly in the Permian, could result in less demand for new compression capacity and potential shut-ins could lead to the eventual return of equipment from the field, thus resulting in lower utilization.