Benchmark Sum-of-Parts Valuation on Susser (SUSS) Reveals $47 Share Price

October 10, 2012 8:34 AM EDT
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Price: $82.46 --0%

Rating Summary:
    2 Buy, 9 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 1 | Down: 2 | New: 3
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Benchmark reiterated a Buy rating on Susser Holdings Corporation (NASDAQ: SUSS) and increased its price target on the Texas-based convenience store holding company to $47.00 (from $42.00).

Susser Holdings is majority owner of Susser Petroleum Partners (NYSE: SUSP) s Houston-based master limited partnership formed in September. Analysts at Benchmark believe the spin off of Susser Petroleum Partners adds value to shareholders of SUSS.

"We increased our price target for Susser Holdings to $47, from $42, using a sum of the parts analysis after the IPO of Susser Petroleum Partners," said analyst Ronald Bookbinder.

"Backing out SUSP EBITDA of approximately $40 million from the consolidated Susser Holding income statement, we expect the convenience store business to generate $125 million in FY2012 EBITDA, which we assign a 7 multiple to equate to a value about $36.50 per share. On the approximate $40 million of EBITDA for SUSP, only half belongs to shareholders of SUSS. Assigning an 11.5 multiple to SUSS shareholders portion of the MLP, SUSP, gives an additional value of $10.50," concluded Bookbinder.

For an analyst ratings summary and ratings history on Susser Holdings Corporation click here. For more ratings news on Susser Holdings Corporation click here.

Shares of Susser Holdings Corporation closed at $33.08 yesterday.

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