UPDATE - Barclays Downgrades Energy Transfer Partners (ETP) to Equalweight; Lower Growth Outlook

UPDATE - Barclays downgrades Energy Transfer Partners (NYSE: ETP) from Overweight to Equalweight. PT maintained at $49.

Barclays analyst says, "We downgrade ETP to EW due to below-average-growth prospects: ETP has lagged its peers on distribution growth due to underperformance of its intrastate business (largest segment with 45% contribution in 2010), and we expect 2011 growth will reach 0.5% compared to peer average of 4.6%. Going forward, we estimate ETP will grow distribution at 3.1% CAGR from 2010-2015, which is roughly 200 bps below peer average of 5.1%. For the peer group we include 1-OW rated diversified large cap MLPs including Enterprise Products Partners (NYSE: EPD), Kinder Morgan Energy (NYSE: KMP), Plains All American (NYSE: PAA), ONEOK Partners (NYSE: OKS). ETP's lower distribution growth is driven by continued pressure in its intrastate business which has exposure to gas price and Texas basis spread as well as its high cost of capital which reduces accretion on organic projects and acquisitions. ETP's cost of blended debt and equity capital currently runs roughly 250 bps higher than its peers."

To see more ratings changes on ETP, Click Here

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