UBS Cuts Price Target on Shell Midstream Partners (SHLX) to $47
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UBS maintained a Buy rating on Shell Midstream Partners, L.P. (NYSE: SHLX), and cut the price target to $47.00 (from $49.00), following the company's 3Q earnings report. SHLX reported Adj EBITDA of $68MM, well below estimates of $87mm and the $77mm reported in 2Q16.
Analyst Shneur Gershuni commented, "Consistent with our view that high growth drop-down MLPs will slow DPU growth and retain cash flow to self-finance growth, SHLX announced today that it expects to grow DPU at a 20% CAGR. This is down from the mid-20's it has been growing at, but still consistent with the "best in class" target. The slower DPU growth should increase coverage in '17e/'18e to 1.62x/1.48x from 1.56x/1.36x. Management indicated that it plans to drop $2.5bn-$2.9bn of assets over 2017 & 2018. We were estimating $2.45bn and have increased our estimate to $2.65bn. The somewhat messy 3Q result overshadows that SHLX remains on track to deliver both organic growth and growth through drops from its supportive GP, Royal Dutch Shell."
Shares of Shell Midstream Partners, L.P. closed at $26.26 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
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