Barclays maintains an 'Underweight' on Ferrellgas Partners (FGP); Margin Pressure Likely to Continue in 2012

Barclays maintains an 'Underweight' on Ferrellgas Partners LP (NYSE: FGP) price target lowered to $21.

Barclays analyst says, "We are lowering our price target from $23 to $21 to reflect a Q4 miss and a challenging outlook for fiscal 2012. FGP reported disappointing Q4 results as the propane sector continues to face margin and volume pressures due to high wholesale propane prices and customer conservation. While FGP maintained its annualized distribution of $2.00/unit, as we expected, coverage is light at 0.84x. Though we expect FGP to post modest distributable cash flow growth in 2012, the Partnership will likely continue at sub-1x coverage. Our price target is based on a 12-month distribution run rate of $2.00 and a target yield of 9.5% (previously 8.75%), reflecting low coverage."

For more ratings news on Ferrellgas Partners LP click here and for the rating history of Ferrellgas Partners LP click here.

Shares of Ferrellgas Partners LP closed at $19.70 yesterday.

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