Wells Fargo Upgrades Access Midstream Partners, L.P. (ACMP) to Outperform
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Price: $48.15 --0%
Rating Summary:
6 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
6 Buy, 4 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Wells Fargo upgraded Access Midstream Partners, L.P. (NYSE: ACMP) from Market Perform to Outperform and raised its valuation range from $32-$35 to $37-$40.
The firm comments, ": (1) Visible And Robust Distribution Growth. We forecast ACMP could increase its distribution by 12.2% annually (i.e. CAGR) over the next five years (vs. 9.1% previously). The recently announced $2.16B acquisition of midstream assets from CHK accelerates cash flow contributions from these assets, which we had previously modeled as a series of drop-downs totaling $2B over a 5-year period. Additionally, the acquisition multiple of 8.2x 2013E EBITDA and ACMP’s related equity and debt financing costs were more favorable than our prior modeling assumptions which support an acceleration of distribution growth. (2) Growth Opportunities In Attractive Resource Plays. Management has earmarked $2.7B of growth capex for 2013-14. We think the acquisition of CHK’s midstream portfolio diversifies ACMP’s position into some of the most attractive natural resource plays in the U.S. including the Eagle Ford, Utica and Niobrara while augmenting its existing footprint in the Haynesville and Marcellus shales. (3) Valuation. On a price-to-DCF to growth (i.e. akin to a PEG ratio) basis, ACMP trades at 0.7x vs. a median of 1.2x for highgrowth G&P MLPs. Thus, we view ACMP’s current valuation as an attractive entry point. (4) Strong Support From A Seasoned GP Sponsor. We view WMB’s ownership stake as a positive given Williams’ successful track record in growing its midstream operations and the bench strength of the management team."
The firm adjusted adjusting 2012 and 2013 DCF per unit ests to $2.19 and $2.94, respectively, from $2.23 and $2.39.
For an analyst ratings summary and ratings history on Access Midstream Partners, L.P. click here. For more ratings news on Access Midstream Partners, L.P. click here.
Shares of Access Midstream Partners, L.P. closed at $32.85 yesterday.
The firm comments, ": (1) Visible And Robust Distribution Growth. We forecast ACMP could increase its distribution by 12.2% annually (i.e. CAGR) over the next five years (vs. 9.1% previously). The recently announced $2.16B acquisition of midstream assets from CHK accelerates cash flow contributions from these assets, which we had previously modeled as a series of drop-downs totaling $2B over a 5-year period. Additionally, the acquisition multiple of 8.2x 2013E EBITDA and ACMP’s related equity and debt financing costs were more favorable than our prior modeling assumptions which support an acceleration of distribution growth. (2) Growth Opportunities In Attractive Resource Plays. Management has earmarked $2.7B of growth capex for 2013-14. We think the acquisition of CHK’s midstream portfolio diversifies ACMP’s position into some of the most attractive natural resource plays in the U.S. including the Eagle Ford, Utica and Niobrara while augmenting its existing footprint in the Haynesville and Marcellus shales. (3) Valuation. On a price-to-DCF to growth (i.e. akin to a PEG ratio) basis, ACMP trades at 0.7x vs. a median of 1.2x for highgrowth G&P MLPs. Thus, we view ACMP’s current valuation as an attractive entry point. (4) Strong Support From A Seasoned GP Sponsor. We view WMB’s ownership stake as a positive given Williams’ successful track record in growing its midstream operations and the bench strength of the management team."
The firm adjusted adjusting 2012 and 2013 DCF per unit ests to $2.19 and $2.94, respectively, from $2.23 and $2.39.
For an analyst ratings summary and ratings history on Access Midstream Partners, L.P. click here. For more ratings news on Access Midstream Partners, L.P. click here.
Shares of Access Midstream Partners, L.P. closed at $32.85 yesterday.
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