Mizuho Securities Starts MPLX LP (MPLX) at Neutral
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Mizuho Securities initiates coverage on MPLX LP (NYSE: MPLX) with a Neutral rating and a price target of $35.00.
Analyst Brian Zarahn commented, "We are initiating coverage of MPLX with a Neutral rating and $35 price target, based on the average of our $38 discounted cash flow model (9.75% discount rate) and $33 EV/EBITDA (14x multiple in 2017) valuation methodologies. MPLX is a diversified, investment grade MLP with strategically located assets and competitive growth rate for a large-cap name supported by organic projects and dropdowns. Management has been working to address the market’s re-rating of MLPX valuation since the Markwest merger, such as through the accretive marine transportation drop down transaction for a 5x multiple. MPLX has strategically located gas gathering, processing and fractionation assets in the Marcellus, Utica and emerging presence in the Permian. The crude and refined products assets are integrated with parent Marathon Petroleum’s refineries. Our neutral rating is based on the growing general partner burden limiting long-term growth and to a lesser degree current valuation."
Shares of MPLX LP closed at $32.80 yesterday.
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