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UGI (UGI): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 FY26, to Jun 30, 2026, filed Aug 6, 2026; rules v1.1
UGI (UGI): 1 rule of 10 triggered on the filings to Jun 30, 2026: FCF growth = the business improved. 2 to review; 3 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
FCF growth = the business improved Triggered · severity medium · confidence medium
Free cash flow rose $4M (+1%), from $386M to $390M, but working capital released $3M more cash than the year before: 75% of the increase came from sources that need not repeat. Operating cash flow before working capital rose by $42M.
Innocent reading: An expansion programme finished, so capex fell back to maintenance levels for good.
Adjusted profit = economic profit To review · confidence low
Adjusted EPS was 10% or more above GAAP in 1 of the last 3 quarters: read the reconciliation before taking the adjusted figure.
A precise DCF value = the true value To review · confidence high
The DCF's point value is 60.50 a share (price 36.87); 83% of it is the terminal value, a number about years no one has seen. Moving wacc by ±1 pt alone takes it from 42.17 to 91.71; across every method the research ran the range is -27 to 329. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Triggered severity medium · confidence medium
Free cash flow rose $4M (+1%), from $386M to $390M, but working capital released $3M more cash than the year before: 75% of the increase came from sources that need not repeat. Operating cash flow before working capital rose by $42M.
The figures and how they are read
| Fiscal year before | FY24 |
| Fiscal year | FY25 |
| Operating cash flow, year before | $1.2B |
| Operating cash flow | $1.2B |
| Capex, year before | $796M |
| Capex | $837M |
| Free cash flow, year before | $386M |
| Free cash flow | $390M |
| Change in FCF | $4M |
| Change in capex | $41M |
| Working capital: change in its cash contribution | $3M |
| Of which: capex cut | 0.00 |
| Of which: working capital released | $3M |
| Share of the increase that need not repeat | +75.0% |
| Operating cash flow before working capital: change | 42000000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY25 (cash flow statement, fiscal year) · FY24 (cash flow statement, fiscal year before)
What would explain it innocently
- An expansion programme finished, so capex fell back to maintenance levels for good
- Suppliers agreed longer payment terms in a contract
- Inventory was brought down after a glut and will stay down
What to look for in the filing
- Maintenance capex (what it costs to keep the assets working)
- Supplier payment terms and any supply-chain financing
- Management's capex guidance for next year
What would show the trap does not apply
- Next year's FCF holds or rises with capex back at its earlier level and working capital no longer releasing cash
- The 10-K's capex guidance and the segment capex show the cut is a completed programme, not deferral
- The working-capital release matches a disclosed change in terms or a divestiture, not stretched payables or a collection push
Look again: next filing.
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 0.2% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY25 |
| Stock compensation | $18M |
| Revenue | $7.3B |
| SBC / revenue | +0.2% |
| Buybacks | $33M |
| Buybacks / SBC | 1.8 |
| Diluted shares, year before | 215.3M shares |
| Diluted shares | 219.2M shares |
| Diluted shares: change | +1.8% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY25 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew -7% against revenue -5% in Q3 FY26; DSO 67 against a median of 39: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 FY26 |
| Revenue, year over year | -4.5% |
| Receivables, year over year | -6.9% |
| Quarter before | Q2 FY26 |
| Revenue y/y, quarter before | +0.7% |
| Receivables y/y, quarter before | -0.4% |
| Days sales outstanding | 66.5 |
| DSO, median of eight quarters | 39.2 |
| Receivables | $768M |
| Revenue | $1.3B |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 FY26 (receivables and revenue) · Q3 FY25 (the same quarter a year earlier)
B08 Adjusted profit = economic profit To review confidence low
Adjusted EPS was 10% or more above GAAP in 1 of the last 3 quarters: read the reconciliation before taking the adjusted figure.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-12-31 / 1.26 / 1.34 / -0.063; 2026-03-31 / 2.09 / 2.33 / -0.115; 2026-06-30 / -0.2 / -0.62 / 2.1 |
| Quarters with adjusted ≥ 10% above GAAP | 1 |
| Quarters compared | 3 |
| Latest gap | +210.0% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-12-31 (adjusted 1.26 vs GAAP 1.34) · 2026-03-31 (adjusted 2.09 vs GAAP 2.33) · 2026-06-30 (adjusted -0.20 vs GAAP -0.62)
What would show the trap does not apply
- The reconciliation shows the excluded items ending (a restructuring with its final charge, a settlement paid) and the gap to GAAP closes in the next quarters
- The excluded items are only amortisation of acquired intangibles and the cash paid for the deals is in the investing cash flow
Look again: next filing.
C02 Low net debt = no refinancing risk Not triggered confidence medium
$117M comes due within a year, 5.7× covered by cash and investments of $476M plus $187M of free cash flow.
The figures and how they are read
| Cash and investments | $476M |
| Debt | $6.6B |
| Net debt | $6.2B |
| Due within a year | $117M |
| Read from | the debt maturity table |
| Free cash flow, twelve months | $187M |
| Cash plus free cash flow | $663M |
| Coverage of what is due | 5.7 |
| Due in the second year | $592M |
| Balance sheet date | 2026-06-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY25 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not applicable
a loss in one of the quarters: EPS growth has no meaning
E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium
Net income of $671M is not at a cyclical high against the last eight years (median $678M, best $1.5B): the P/E of 11.8× is on a normal year.
The figures and how they are read
| market value | $7.9B |
| net income ttm | $671M |
| pe ttm | 11.80 |
| net income median fy | $678M |
| pe mid cycle | 11.70 |
| net income peak fy | $1.5B |
| years | FY18 / 719.0; FY19 / 256.0; FY20 / 532.0; FY21 / 1467.0; FY22 / 1073.0; FY23 / -1502.0; FY24 / 269.0; FY25 / 678.0 |
| down years in window | 3 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q3 FY26 (net income, trailing twelve months)
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 60.50 a share (price 36.87); 83% of it is the terminal value, a number about years no one has seen. Moving wacc by ±1 pt alone takes it from 42.17 to 91.71; across every method the research ran the range is -27 to 329. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 60.50 |
| price | 36.87 |
| terminal value share | +82.6% |
| swing by input | WACC / ±1 pt / 42.17 / 91.71; Revenue growth (each year) / ±5 pts / 42.4 / 82.41; Operating margin / ±3 pts / 43.06 / 77.93; Tax rate / ±5 pts / 55.15 / 65.85 |
| range all methods | -27.26; 329.48 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → UGI: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.