UBS Upgrades Enbridge Energy Partners (EEP) to Buy

UBS upgraded Enbridge Energy Partners (NYSE: EEP) from Neutral to Buy with a price target of $34.00, citing transparency on growth outlook.

Analyst Shneur Gershuni commented, "Alongside 3Q15 earnings today, EEP mgmt. increased its transparency of its dropdown schedule, with upwards of ~$1,200MM in options (Eastern Access, Mainline, Line 3 Replacement) and the possibility of $500MM/yr in selective drops at EEP. This is in contrast to 2Q15 earnings, where mgmt removed its dropdown visibility, and injected uncertainty around growth. This should provide more confidence in the units. EEP also provided colour on its dist growth outlook of 2-5%, highlighting that the high end of the range is achievable with organic growth projects, and upsize options. $2B of dropdown potential could push EEP’s dist. CAGR above 5%. We expect EEP will grow its dist towards the mid-range in the near term, and accelerate as projects enter service (2018-2019). Given its slate of growth prospects, IG rating and stable cash flows, we believe EEP is attractive and are upgrading to Buy."

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

Shares of Enbridge Energy Partners closed at $28.58 yesterday.

You May Also Be Interested In

• UBS Upgrades UDR, Inc. (UDR) to Buy
• IDEX Corp (IEX) PT Lowered to $256 at Baird
• Watsco (WSO) PT Raised to $460 at Baird