Mizuho Securities Starts NuStar GP Holdings (NSH) at Neutral

September 30, 2016 8:10 AM EDT
Get Alerts NSH Hot Sheet
Price: $30.50 -0.81%

Rating Summary:
    3 Buy, 5 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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Mizuho Securities initiates coverage on NuStar GP Holdings (NYSE: NSH) with a Neutral rating and a price target of $26.00.

Analyst Brian Zarahn commented, "We are initiating coverage of NSH with a Neutral rating and $26 price target. Our $26 price target is based on the average of our $24 discounted cash flow model (10.25% discount rate) and $27 EV/Adjusted EBITDA (12.75x multiple in 2017) valuation methodologies. NSH offer a healthy yield of 8.3%, one of the highest among general partner peers. We believe the distribution is safe, supported by relatively stable, fee-based transportation and storage cash flows generated by underlying MLP NuStar Energy (NS). However, NSH’s high distribution yield is largely attributable to an expected below-average distribution growth rate (we do not forecast NSH or NS to post distribution growth until 2019) and a 25% incentive distribution cap vs. 50% for most other GPs. However, for patient, income-oriented investors, NSH provides a robust yield with upside potential from future NS equity issuance or distribution bumps."

For an analyst ratings summary and ratings history on NuStar GP Holdings click here. For more ratings news on NuStar GP Holdings click here.

Shares of NuStar GP Holdings closed at $25.50 yesterday.

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