Wells Fargo Downgrades Global Partners, L.P. (GLP) to Underperform; Near-term Economic Uncertainty, Challenging Operating Environment

Wells Fargo downgraded Global Partners, L.P. (NYSE: GLP) from Market Perform to Underperform. Valuation range lowered to $21-$23 from $26-28.

Wells analyst says, "GLP announced that it expects to report Q2 2011 EBITDA in a range of $14 million to $16 million. This compares to our previous estimate of $18.2 million. Management stated that less favorable market conditions continue to pressure margins as the forward gasoline price curve remains challenging. While we had expected Q2 2011 results to be weak, it seems that market conditions are more challenging than expected and may remain so over the next several quarters at least, in our opinion, due mainly to lack of favorable purchasing opportunities and higher commodity prices which could result in demand destruction and an increase in working capital cost. As a result, distribution growth is less visible, in our opinion, while the risk profile for GLP has increased. We are lowering our 2011 and 2012 DCF per unit estimates to $1.88 and $2.03 from $2.23 and $2.49, respectively."

For more ratings news on Global Partners, L.P. click here and for the rating history of Global Partners, L.P. click here.

Shares of Global Partners, L.P. closed at $24.64 yesterday.

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