Wunderlich Downgrades Buckeye Partners (BPL) to Hold; Prefer BGH

October 26, 2009 8:34 AM EDT

Wunderlich downgrades Buckeye Partners (NYSE: BPL) to Hold; Price target $51.50

Wunderlich analyst says, "We are downgrading Buckeye Partners, L.P. (BPL) to Hold, as the strong run in the units now more fully discounts all of our assumptions and as we see an equity deal as likely in the next few quarters. We have adjusted our estimates for a offering in 1Q10. We continue to view Buckeye as a solid long-term play on the relatively inelastic demand for refined products, but we see better total return prospects elsewhere in the sector, particularly at the firm's general partner. We reiterate our $51.50 target, implying 8.4% total return over the coming year, inclusive of our distribution estimates. We expect BPL to announce a distribution of $0.925 this week.

"For investors tolerant of lower liquidity and higher beta, all things being equal, we prefer to be pari passu with private equity firm Arclight, which owns and controls BPL's general partner, Buckeye GP Holdings (NYSE: BGH)."

To see more analyst ratings on BPL Click Here.

Buckeye Partners, L.P., through its subsidiaries, engages in the transportation, terminalling, and storage of refined petroleum products for integrated oil companies, large refined products marketing companies, and users of petroleum products in the United States.

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