Barclays Maintains an 'Equalweight' on Holly Energy Partners (HEP); Dropdown Sooner than Expected

Barclays maintains an 'Equalweight' on Holly Energy Partners (NYSE: HEP) price target of $57.00.

Barclays analyst says, "$340mm storage and pipe acquisition should support incremental HEP growth and stability; Comes ahead of our 2012 drop expectation. The first dropdown from the new HollyFrontier (NYSE: HFC) is a little sooner and larger than our estimate of a more modest drop in 1H12 following the expected UNEV pipeline acquisition. While management has only provided a revenue estimate so far, on a preliminary basis we view the transaction as modestly favorable for HEP with accretion in the 4-5% range. Positives include the parent taking equity (decreases financing risk), 15-year take or pay contract (limits volume risk) and increased geographic diversification (adds KS and WY footprint)."

For more ratings news on Holly Energy Partners click here and for the rating history of Holly Energy Partners click here.

Shares of Holly Energy Partners closed at $52.30 yesterday.

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