Mizuho Securities Starts Magellan Midstream Partners (MMP) at Neutral

September 30, 2016 8:06 AM EDT
Get Alerts MMP Hot Sheet
Price: $74.64 +0.66%

Rating Summary:
    11 Buy, 7 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Mizuho Securities initiates coverage on Magellan Midstream Partners (NYSE: MMP) with a Neutral rating and a price target of $73.00.

Analyst Brian Zarahn commented, "We are initiating coverage of MMP with a Neutral rating and $73 price target, based on the average of our $75 discounted cash flow model (8.25% discount rate) and $71 EV/Adjusted EBITDA (16x multiple in 2017) valuation methodologies. MMP is a stable, investment grade liquids infrastructure-focused MLP with a low cost of capital, healthy distribution coverage and reasonable growth rate for a large cap name. Stability supported by primarily fee-based cash flows generated from transportation and storage assets. Low cost of capital underpinned by BBB+ credit rating (highest in MLP sector) and no general partner incentive distribution rights structure. Our hold rating is based on valuation and our assumption of modest decline in long-term distribution growth rate from double-digit to levels of past few years to 7% CAGR to 2019."

For an analyst ratings summary and ratings history on Magellan Midstream Partners click here. For more ratings news on Magellan Midstream Partners click here.

Shares of Magellan Midstream Partners closed at $70.24 yesterday.

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