Global Hunter Securities on Energy Infrastructure/MLPs: Downgrading CPNO, DPM, OKS & XTEX

July 2, 2012 9:49 AM EDT Send to a Friend
Get Alerts EEP Hot Sheet
Price: $36.43 --0%

Rating Summary:
    4 Buy, 10 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 29 | Down: 43 | New: 4
Trade EEP Now!
Join SI Premium – FREE
Global Hunter Securities on Energy Infrastructure/MLPs: Downgrading CPNO, DPM, OKS & XTEX

Analyst, Bernard Colson, said, "We are downgrading a handful of natural gas gathering & processing MLPs and revising estimates based on our belief that the NGL market environment will favor lower ethane and propane prices going forward. We believe a weakening US economy, high propane inventories (and prices) and continued weakness in natural gas prices all indicate a higher risk that NGL prices stay lower for longer. This results in caution toward the gathering & processing subsegment. We recommend positioning defensively going into the Q2:12 reporting season, favoring fee-based, diversified MLPs with low exposure to unhedged NGLs. Names such as Enbridge Energy Partners (NYSE: EEP), Tesoro Logistics Partners (Nasdaq: TLLP), Plains All American Pipeline Partners (NYSE: PAA) and Western Gas Partners (NYSE: WES), a natural gas gathering & processing MLP with 96% fixed fee and fee-like contracts) appeal to us currently."

"We are downgrading Copano (Nasdaq: CPNO) to Reduce, DCP Midstream (NYSE: DPM) to Neutral, ONEOK (NYSE: OKS) to Accumulate and Crosstex (Nasdaq: XTEX) to Accumulate. We are maintaining our ratings on Enterprise Products Partners (NYSE: EPD) (Accumulate), Regency Energy Partners (NYSE: RGP) (Accumulate) and WES (Buy). The highest rating currently assigned to an MLP with meaningful NGL price exposure is Accumulate, reflecting the belief that a challenging NGL environment will translate to muted performance across the peer group. We do not consider WES to be exposed to NGL market dynamics given its 96% fee and fee-like contract structure. Along with the downgrades, we are revising estimates for many of our NGL-exposed MLPs."


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst EPS Change, Analyst EPS View, Analyst PT Change, Downgrades

Add Your Comment