GLOBAL PARTNERS LP (GLP) stock intrinsic value fair value estimate & owner earnings analysis

Global Partners is a fuel distribution and retail partnership. At the end of 2025 it owned, leased or supplied 1,524 gasoline stations, including 290 convenience stores it runs itself, mostly in New England, New York, New Jersey and Pennsylvania, plus Maryland and Virginia. Another 67 stations in Texas are run through its Spring Partners Retail joint venture. It also runs a network of fuel terminals from Maine to Florida and the Gulf Coast, and sells gasoline, heating oil, diesel, residual oil and renewable fuels wholesale. In 2025 the stations business earned $846 million of the company's $1.19 billion product margin, wholesale earned $322 million, and commercial sales such as ship fuelling earned $26 million. The stations business is the steady part. Wholesale swings with fuel market conditions. How we measured earnings. Reported operating cash flow is hard to read for this company because its receivables, inventory and payables move with fuel prices. Cash flow was $512 million in 2023 and just $32 million in 2024, and working-capital swings of about $233 million each way caused almost all of that gap. We remove those swings. We subtract unit-based pay and the capital spending needed to keep the assets running. We also subtract preferred distributions. One structural feature matters a lot here. The general partner holds incentive distribution rights. Above $0.6625 per unit per quarter, it takes 48.67% of every extra dollar paid out, and the current payout is already above that level. We therefore count only what common unitholders would receive if all the cash were paid out under the partnership's waterfall. On that basis, owner earnings per common unit were $2.69 in 2017, $3.08 in 2018, $2.14 in 2019, $3.39 in 2020, $2.40 in 2021, $5.98 in 2022, $3.67 in 2023, $3.24 in 2024 and $3.53 in 2025. We leave out 2016, which included a cash payment to end a railcar sublease early and write-downs at its North Dakota crude-by-rail terminals. Our starting level is the 2017-2025 median of $3.24. That period includes weak years (2019, 2021), a boom year (2022) and ordinary ones, so it covers a full cycle. What changed recently. The company bought 25 terminals from Motiva in December 2023 and four more from Gulf Oil in April 2024, in Chelsea, Massachusetts, New Haven, Connecticut, Linden, New Jersey and one other location. Borrowing paid for much of this. Total debt was about $1.56 billion at the end of 2025, and interest expense rose from $85.6 million in 2023 to $137.2 million in 2025. The first half of 2026 was unusually strong. Owner earnings were about $165 million, against about $86 million in the first half of 2025, which is already more than all of 2025. Both quarters were strong, but the annual report does not explain the cause. Fuel-market windfalls like 2022 have faded before, so we count this cash in 2026 only and do not raise the long-run level. Base case ($48.23 per unit). In 2026, the first half as reported plus a second half like 2025's gives about $4.72 per unit. After that, earnings go back to $3.24 and grow 2% a year for nine years. That growth comes from reinvesting the cash kept after distributions, which lifted per-unit earnings from about $2.69 (2017-2019) to about $3.53 (2023-2025). It is held below that pace because the added earnings were mostly debt-funded, the general partner takes nearly half of higher payouts, and station gasoline volume fell 5% in 2025. After year ten, earnings shrink 2% a year for twenty years as gasoline volumes keep eroding, and we count nothing beyond that. Bear case ($23.22 per unit). The same 2026 first half, but a second half only half as good. After that, earnings fall to $2.26, which is the weak-year level of 2019 and 2021 less higher interest cost when the 6.875% 2029 notes are refinanced at rates like the 7.125% and 8.25% on recent issues. Earnings then decline 3% a year for nine years as station volumes and site sales continue, then 5% a year through year 25, with nothing after. With $1.56 billion of debt, weak fuel markets hit common unitholders harder. Bull case ($65.98 per unit). Earnings start from the post-acquisition median of $3.53 and grow 4.5% a year for nine years, the per-unit pace actually achieved since 2017, as the new terminals and retained cash keep paying off. Earnings then hold flat for twenty years. The value we see. All cases use a 6% discount rate. We put the units at roughly $23-$66, with a central value of about $48. The margin-of-safety price is $29.00, a wide discount to the base case. This is a business with volatile margins, meaningful debt and a general partner that takes a large share of growth. The price is set with the bear case in view. What would make this wrong. Gasoline volume could fall faster at the Northeast stations. Refinancing could cost more than the recent 7-8% notes. The 2026 strength could reverse sharply. On the upside, the new terminals could lift earnings for good. Preferred distributions for 2020-2022 were worked out from the income allocation rather than stated directly.