UBS Cuts Price Target as Ferrellgas Partners (FGP) Cuts Distribution

November 23, 2016 11:26 AM EST
Get Alerts FGP Hot Sheet
Price: $8.49 -1.05%

Rating Summary:
    1 Buy, 5 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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UBS reiterated a Sell rating on Ferrellgas Partners LP (NYSE: FGP), and cut the price target to $5.00 (from $6.50), following the company's announced distribution cut. Based on current estimates, UBS believes that the roughly 80% distribution cut that FGP announced will allow it to remain in compliance with its leverage covenants.

Analyst Shneur Gershuni commented, "FGP announced an ~80% distribution cut to $0.40/unit from $2.05/unit on an annualized basis. This cut is greater than our previous estimate of a ~75% cut to $0.51/unit, and the cut to $1.00/unit on an annualized basis that was mentioned on its FY4Q16 conference call that its Board was contemplating. Management noted that if the quarterly distribution of $0.10/unit ($0.40/unit annualized) is maintained throughout FY17, that on an annualized basis capital savings would be roughly $160MM which would be used to reduce leverage, increase liquidity and improve its balance sheet."

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

Shares of Ferrellgas Partners LP closed at $7.33 yesterday.

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