Mizuho Securities Starts Phillips 66 Partners (PSXP) at Buy

Mizuho Securities initiates coverage on Phillips 66 Partners (NYSE: PSXP) with a Buy rating and a price target of $55.00.

Analyst Brian Zarahn commented, "Our $55 price target is based on the average of our $60 discounted cash flow model (9.25% discount rate) and $50 EV/Adjusted EBITDA (16x multiple in 2017) valuation methodologies. PSXP is a high-growth, diversified investment grade MLP with stable cash flows and a strong parent. Growth visibility is supported by drop downs from investment grade parent PSX and organic projects. While the growth rate is moderating from very high levels, we still expect a healthy 19% distribution CAGR 2016-19. Cash flow stability is underpinned by long-term contracts and asset integration with PSX. We expect the parent to continue to grow its midstream business which provides long-term visibility for PSXP."

For an analyst ratings summary and ratings history on Phillips 66 Partners click here. For more ratings news on Phillips 66 Partners click here.

Shares of Phillips 66 Partners closed at $47.78 yesterday.

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