Mizuho Securities Starts Shell Midstream Partners, L.P. (SHLX) at Buy

September 30, 2016 8:13 AM EDT
Get Alerts SHLX Hot Sheet
Price: $28.50 +0.21%

Rating Summary:
    6 Buy, 3 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 14 | Down: 11 | New: 8
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Mizuho Securities initiates coverage on Shell Midstream Partners, L.P. (NYSE: SHLX) with a Buy rating and a price target of $37.00.

Analyst Brian Zarahn commented, "We are initiating coverage of SHLX with a Buy rating and $37 price target. Our $37 price target is based on the average of our $40 discounted cash flow model (8.75% discount rate) and $34 EV/Adjusted EBITDA (17.5x multiple on 2017) valuation methodologies. SHLX is a high-growth, low-risk crude oil and refined products pipeline MLP with highly visible growth prospects, stable cash flows and an investment grade parent. The Partnership is well positioned to meet our 24% distribution growth CAGR (highest in our coverage universe) due to by a significant drop down inventory of $3.5 billion or 11x 2Q16 run rate EBITDA. High stability is supported by long-term contracts with a diverse customer base. Premium valuation is warranted due to strong growth visibility and stability. On PEG-like ratio of DCF multiple/growth, SHLX valuation is reasonable at 0.8x."

For an analyst ratings summary and ratings history on Shell Midstream Partners, L.P. click here. For more ratings news on Shell Midstream Partners, L.P. click here.

Shares of Shell Midstream Partners, L.P. closed at $31.35 yesterday.

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