Mizuho Securities Starts Enbridge Energy Partners (EEP) at Buy
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Mizuho Securities initiates coverage on Enbridge Energy Partners (NYSE: EEP) with a Buy rating and a price target of $29.00.
Analyst Brian Zarahn commented, "We are initiating coverage of EEP with a Buy rating and $29 price target, based on the average of our $31 discounted cash flow model (9.25% discount rate) and $27 EV/EBITDA (13x multiple in 2017) valuation methodologies. EEP is a stable, investment grade crude oil focused pipeline MLP with a healthy yield, attractive valuation and potential catalysts from a growing parent. Cash flow supported by largely fee-based oil transportation cash flows with exposure to key supply (Western Canada, Bakken) and demand (Midwest) regions. While the smaller gas gathering and processing business has been underperforming, EEP is evaluating strategic options for the business. EEP offers an attractive yield of 9.2% and discounted valuation. We believe parent Enbridge Inc’s pending merger with Spectra Energy is a positive for EEP, by improving the parent’s credit profile, scale and potentially providing more growth opportunities for EEP, which currently has a below-average growth rate."
Shares of Enbridge Energy Partners closed at $25.14 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesBakken Formation, Crude Oil, Definitive Agreement
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