Goldman Sachs Downgrades Sunoco Logistics Partners (SXL) to Sell

February 29, 2012 7:42 AM EST Send to a Friend
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Price: $44.39 -1.33%

Rating Summary:
    4 Buy, 9 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 26 | Down: 32 | New: 6
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Goldman Sachs downgraded Sunoco Logistics Partners (NYSE: SXL) from Neutral to Sell with a price target of $36 (up from $30).

The firm said valuation implies a materially higher growth rate than they believe its assets are capable of.

Goldman notes SXL's current 4.1% yield implies cash flow growth in the low-teens, which is higher than their view that distributions will rise 7%-8% annually over the next four years. Comparable Plains (NYSE: PAA) trades at a 90 bp discount to SXL despite a similar growth profile but mroe attractive fee-based internal initiatives. Also Magellan (NYSE: MMP) trades at a 40 bp discount to SXL on distribution growth of 9%-10%.

For an analyst ratings summary and ratings history on Sunoco Logistics Partners click here. For more ratings news on Sunoco Logistics Partners click here.

Shares of Sunoco Logistics Partners closed at $40.40 yesterday.




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