Mizuho Securities Starts Valero Energy Partners LP (VLP) at Buy

September 30, 2016 8:20 AM EDT
Get Alerts VLP Hot Sheet
Price: $42.59 --0%

Rating Summary:
    10 Buy, 3 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 22 | Down: 27 | New: 31
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Mizuho Securities initiates coverage on Valero Energy Partners LP (NYSE: VLP) with a Buy rating and a price target of $57.00.

Analyst Brian Zarahn commented, "We are initiating coverage of VLP with a Buy rating and $57 price target. Our $57 price target is based on the average of our $58 discounted cash flow model (9.75% discount rate) and $57 EV/Adjusted EBITDA (16x multiple on 2017) valuation methodologies. VLP offers above-average cash flow growth and stability at a reasonable valuation. The Partnership is well positioned to achieve our 23% cash distribution CAGR (3-year) estimate supported by a $1 billion EBITDA dropdown inventory, which is 4x current EBITDA, and healthy distribution coverage of 2x. Strong cash flow stability backed by primarily long-term, take-or-pay contracts with investment grade parent Valero Energy (VLO), no direct commodity price exposure, midstream assets integrated with VLO’s refineries and a solid balance sheet."

For an analyst ratings summary and ratings history on Valero Energy Partners LP click here. For more ratings news on Valero Energy Partners LP click here.

Shares of Valero Energy Partners LP closed at $43.05 yesterday.

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