Mizuho Securities Starts Dominion Midstream Partners, LP (DM) at Buy

September 30, 2016 7:50 AM EDT
Get Alerts DM Hot Sheet
Price: $27.50 +0.18%

Rating Summary:
    11 Buy, 2 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 21 | Down: 31 | New: 25
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Mizuho Securities initiates coverage on Dominion Midstream Partners, LP (NYSE: DM) with a Buy rating and a price target of $30.00.

Analyst Brian Zarahn commented, "We are initiating coverage of DM with a Buy rating and $30 price target, based on the average of our $33 discounted cash flow model (9% discount rate) and $27 EV/Adjusted EBITDA (17x multiple in 2017) valuation methodologies. DM is a stable, high-growth natural gas infrastructure MLP with a strong parent. We expect DM to post 22% distribution CAGR to 2020, among the highest in the MLP sector. The Partnership has strong growth visibility with an approximate $2.5 billion EBITDA dropdown inventory, which is 23x DM 2Q16 run rate, from investment grade parent Dominion Resources. Even post-2020, $1.77bn EBITDA drop-down inventory will remain at the parent, providing further growth visibility. DM’s premium valuation is warranted due to its above-average growth rate, visibility, stability and exposure to demand-pull natural gas infrastructure assets. In addition, DM has a low cost of capital to finance its dropdown strategy."

For an analyst ratings summary and ratings history on Dominion Midstream Partners, LP click here. For more ratings news on Dominion Midstream Partners, LP click here.

Shares of Dominion Midstream Partners, LP closed at $23.50 yesterday.



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