Wells Fargo Downgrades El Paso Pipeline Partners (EPB) to Market Perform on Valuation

Earlier, Wells Fargo downgraded El Paso Pipeline Partners (NYSE: EPB) from Outperform to Market Perform with a price target range of $35 to $38.

"We are downgrading EPB to Market Perform from Outperform primarily on valuation as near-term growth potential appears fairly reflected in the current unit price, in our view," the firm notes. "Q3 operating results and quarterly distribution increase were in-line with our expectations. The partnership reiterated its 2012 distribution target of $2.25 per unit and continues to expect to grow distributions by an average annual rate of 9% from 2011-15. In addition, management expects EPB to generate excess cash flow of more than $95MM versus previous guidance of over $80MM reflecting cost synergies with Kinder Morgan Inc."

Wells raised 2012 and 2013 DCF/unit estimates to $2.74 and $2.95, respectively, from $2.70 and $2.92 to reflect several adjustments to their model.

For an analyst ratings summary and ratings history on El Paso Pipeline Partners click here. For more ratings news on El Paso Pipeline Partners click here.

Shares of El Paso Pipeline Partners closed at $36.66 yesterday.

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