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Dahlman Rose Starts Northern Teir Energy Inc (NTI) at Buy

August 10, 2012 10:23 AM EDT Send to a Friend
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Price: $26.18 --0%

Rating Summary:
    7 Buy, 4 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Dahlman Rose initiates coverage on Northern Teir Energy Inc (NYSE: NTI) with a Buy. PT $23.00.

Today’s report by Dahlman and Rose notes that Northern Tier Energy is a variable dividend MLP consisting of the St. Paul Park refinery, an associate retail business with outlets in three states and sales of between 75MM and 85MM gallons per quarter, and interest in various pipeline assets The company purchased the assets and applicable leasing rights from the predecessor company to Marathon Petroleum (NYSE: MPC) in 2010 for $608MM, including provisions from several earn-out agreements.

“Although a turnaround will result in lighter dividend power in 2013, we believe the dramatic reduction in cost basis over the forward 18 months renders units an attractive option on crude differentials,” said analyst and Dahlman Rose VP Sam Margolin.

“St. Paul receives 100% of its crude slate from Western Canada and the Bakken, with share between the two sources fluctuating with differentials. While we remain conservative on our underlying Brent/WTI differential forecast for next year, we remain confident that light crude pricing North of Cushing can maintain highly favorable discounts, particularly as nearly 400,000 bpd of light crude demand in PADD2 is backed out with a series of upgrades at competing refineries,” added Marolin.

For an analyst ratings summary and ratings history on Northern Teir Energy Inc click here. For more ratings news on Northern Teir Energy Inc click here.

Shares of Northern Teir Energy Inc closed at $16.90 yesterday.




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