Wells Fargo Upgrades Capital Product (CPLP) to Outperform; A Lot To Like About A 14% Yield And Product Tanker Leverage

Wells Fargo upgraded Capital Product (NASDAQ: CPLP) from Market Perform to Outperform, price target range raised from $7-8 to $9-$10.

Wells analyst says, "We are upgrading shares of CPLP as we believe shares are both significantly undervalued and that CPLP's core business (product tankers) is potentially poised to start a cyclical recovery in 2012. Following the completion of its merger with CRU, the chartering of its spot VLCC fleet (Q4), and renegotiation with COSCO over its large dry bulk charter (Q4), we believe most potential hurdles are behind CPLP at this point, and we believe its risk/reward profile is skewed meaningfully to the positive. We have adjusted our 2011 and 2012 EPU estimates to $0.26/unit and $0.23/unit, down from $0.29/unit and $0.25/unit, respectively, and we are maintaining our current distribution estimate of $0.93/unit for 2012 and 2013, which drives a distribution yield of 14%."

For an analyst ratings summary and ratings history on Capital Product click here. For more ratings news on Capital Product click here.

Shares of Capital Product closed at $6.60 yesterday.

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