Mizuho Securities Starts Phillips 66 Partners (PSXP) at Buy
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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."
Shares of Phillips 66 Partners closed at $47.78 yesterday.
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