Barclays Maintains an 'Overweight' on Regency Energy Partners (RGNC); Q1 light, LDH Acquisition Improves Organic Investment Opportunity
RGNC Hot Sheet
Rating Summary:2 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 19 | Down: 16 | New: 82
Barclays maintains an 'Overweight' on Regency Energy Partners (NASDAQ: RGNC), PT $30.
Barclays analyst says, "While we continue to believe 2011 distribution growth will be modest and lagging, due to light coverage and partial year effects of the LDH acquisition, the acquisition brings an additional $500 mm of organic investment opportunity for RGNC (per its 30% interest in the JV which has a $1.5 billion opportunity) and should allow RGNC to better compete for G&P projects in liquids rich basins. RGNC has exposure to the Eagle Ford shale and Permian basin that offer strong growth opportunity. With the 100 m b/d fractionator project announced from the JV, RGNC can offer a full range of NGL downstream capabilities which should improve RGNC's ability to attract producer commitments to execute accretive projects. We estimate RGNC can grow distribution at a CAGR of 5% from 2011-2015 based on $650 mm of growth investment assumptions per year ($350 mm organic, $350 mm acquisition)." (Barclays raises FY11 EPS estimate from $0.02 to $0.05, lowers FY12 from $0.48 to $0.42)
For more ratings news on Regency Energy Partners click here and for the rating history of Regency Energy Partners click here.
Shares of Regency Energy Partners closed at $26.35 yesterday, with a 52 week range of $20.31-$28.35.
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Barclays analyst says, "While we continue to believe 2011 distribution growth will be modest and lagging, due to light coverage and partial year effects of the LDH acquisition, the acquisition brings an additional $500 mm of organic investment opportunity for RGNC (per its 30% interest in the JV which has a $1.5 billion opportunity) and should allow RGNC to better compete for G&P projects in liquids rich basins. RGNC has exposure to the Eagle Ford shale and Permian basin that offer strong growth opportunity. With the 100 m b/d fractionator project announced from the JV, RGNC can offer a full range of NGL downstream capabilities which should improve RGNC's ability to attract producer commitments to execute accretive projects. We estimate RGNC can grow distribution at a CAGR of 5% from 2011-2015 based on $650 mm of growth investment assumptions per year ($350 mm organic, $350 mm acquisition)." (Barclays raises FY11 EPS estimate from $0.02 to $0.05, lowers FY12 from $0.48 to $0.42)
For more ratings news on Regency Energy Partners click here and for the rating history of Regency Energy Partners click here.
Shares of Regency Energy Partners closed at $26.35 yesterday, with a 52 week range of $20.31-$28.35.
Discover Wall Street's best ratings calls with the pros - Ratings Insider Elite. Free Trial!
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