The country’s second-largest energy infrastructure company, Kinder Morgan Inc. (NYSE: KMI), will report first-quarter 2017 earnings after markets close Wednesday. Analysts have forecast earnings per share (EPS) of $0.18, flat with the same period last year, and revenues of $3.35 billion, up 5% year over year.

In a note to investors published Wednesday morning, analysts at Jefferies see Kinder Morgan’s total earnings before depletion, depreciation and amortization improving by 2.9% sequentially, but falling 1.3% year over year. Net income is forecast to dip 5.9% sequentially and 4.2% year over year.

The analysts noted four major transactions among master limited partnerships (MLPs) in the first quarter, all either drop-downs or simplification moves, that are expected to lower the cost of capital for the MLPs and other companies in the sector.

Another significant change in the space is the elimination of a general partner’s (GP’s) incentive distribution rights (IDRs). The analysts noted:

[A]s some entities eradicate their IDR structures and the associated conflicts of interest between their two equity groups, a prisoner’s dilemma takes shape for those which remain: the asset-lite GPs may continue enjoying its free ride on the back of an IDR-laden affiliate MLP, but with each passing peer transaction it is rendered increasingly less competitive. In this vein, it seems 1Q17 proved to be a tipping point for Midstream MLPs as many determined the structural costs outweighed the longer-term capital cost & growth benefits provided via corp. simplification.

Jefferies raised its rating on two MLPs: Energy Transfer Equity L.P. (NYSE: ETE) was raised to Buy and National Fuel Gas Co. (NYSE: NFG) was raised to Hold.

Energy Transfer Equity’s associated MLP, Energy Transfer Partners L.P. (NYSE: ETP), is forecast by Jefferies to post adjusted EBITDA of about $1.5 billion, in line with the consensus estimates. The analysts also expect earnings per common unit of $0.25, a sequential decline of nearly 45% and a year-over-year decline of nearly 35%. The consensus earnings estimate is $0.18 per common unit on revenues of $6.7 billion. For the full year, Jefferies estimates earnings of $1.49 per common unit, compared with a consensus estimate of $1.42. The common units traded up about 0.7% late Wednesday morning, at $35.29 in a 52-week range of 31.64 to $43.50. The consensus price target is $43.90.

Jefferies estimates National Fuel Gas to report EPS of $1.10, well above the consensus estimate of $1.04. The analysts downgraded the company to Underperform about 10 days ago following the rejection of a permit to construct a new pipeline in New York. The ensuing 12% dip in the share price has led Jefferies to up its rating to Hold with a price target of $52. Shares traded this morning at $54.21, in a 52-week range of $50.61 to $61.25, and the consensus price target is $61.50.

Enterprise Products Partners L.P. (NYSE: EPD) is the country’s largest MLP/infrastructure company, with a market cap of around $59 billion. Jefferies is looking for net income of $717 million, up 4.4% sequentially and 9.1% year over year in the first quarter. Adjusted EBITDA is forecast at $1.4 billion, above the consensus estimate of $1.37 billion and distributable cash flow is estimated at $1.04 billion. Consensus estimates call for earnings per common unit of $0.32 (Jefferies forecasts $0.34) and revenues of $6.14 billion. Jefferies has a Buy rating on the stock with a price target of $33. Shares traded late Wednesday morning at $27.80, down about 0.7%, in a 52-week range of $24.01 to $30.25. The consensus price target is $32.92.

As for Kinder Morgan, the stock traded down about 0.2% Wednesday morning, at $21.12 in a 52-week range of $16.63 to $23.36. The consensus price target is $25.33. Jefferies rates the stock a Hold with a price target of $23 and an EPS estimate of $0.66 for the year, slightly below the $0.69 per share consensus. Kinder Morgan said in January that it intends to pay an annual dividend of $0.50 in 2017.

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