UBS Downgrades Suburban Propane (SPH) to Neutral

UBS downgraded Suburban Propane (NYSE: SPH) from Buy to Neutral with a price target of $35.00.

Analyst Shneur Z. Gershuni commented, "We currently expect propane prices to average $0.48/gallon in 2016 rising to $0.67/gallon in 2017 (Click here for our most recent NGL products report ). The lift in pricing is primarily due to a clearing of an inventory overhang in part due to record Propane exports. Historically, during periods of rising prices margins typically tend to compress as the cost increases to consumers tend to lag the increases in wholesale pricing."

"Based on historical data, SPH has traded at a roughly 8.0% yield, however we do not currently expect distribution growth during our forecast period vs a historical 3-year distribution growth CAGR of roughly 1%, hence as a result of slowing growth naturally we would expect the market to require a higher yield and believe that SPH should trade closer to a 10% yield."

For an analyst ratings summary and ratings history on Suburban Propane click here. For more ratings news on Suburban Propane click here.

Shares of Suburban Propane closed at $34.85 yesterday.

You May Also Be Interested In

• Summit Insights Downgrades Silicon Labs (SLAB) to Hold, 'expect its stock to be an inline performer'
• Goldman Sachs Upgrades Bank Central Asia Tbk (BBCA:IJ) (PBCRY) to Buy
• Piper Sandler Downgrades Independent Bank Group (IBTX) to Underweight, 'Expectations of Slower NII Recovery'