Mizuho Securities Starts Sunoco Logistics Partners (SXL) at Neutral
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Mizuho Securities initiates coverage on Sunoco Logistics Partners (NYSE: SXL) with a Neutral rating and a price target of $30.00.
Analyst Brian Zarahn commented, "We are initiating coverage of SXL with a Neutral rating and $30 price target. Our $30 price target is based on the average of our $33 discounted cash flow model (9.75% discount rate) and $27 EV/EBITDA (14x multiple on 2017) valuation methodologies. SXL is a diversified, investment grade midstream MLP with strategically located assets, primarily fee-based transportation and storage cash flows and competitive distribution growth. SXL provides exposure to NGL volume growth in the Marcellus/Utica through its Mariner East and West system and crude volume growth in the Permian. Combining contributions from organic projects and expected moderate commodity price recovery, we expect SXL to post 7% distribution CAGR to 2019. In our opinion, SXL’s positive attributes are partially offset by valuation, financing needs and tighter distribution coverage."
Shares of Sunoco Logistics Partners closed at $27.84 yesterday.
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