Wells Fargo Starts MPLX LP (MPLX) at Market Perform

Wells Fargo initiates coverage on MPLX LP (NYSE: MPLX) with a Market Perform. PT $32.50.

The firm comments, "MPLX is poised to deliver above average distribution growth supported by (1) drop-down acquisitions from its GP sponsor (Marathon Petroleum), (2) organic investments around Marathon’s assets, and (3) potential third-party acquisitions. The partnership's premium valuation is supported by its fee-based cash flows, long-term contracts with its GP sponsor, and strong balance sheet, in our view. We forecast a five-year distribution CAGR of 14.7% predicated on $2.5B of dropdowns and $250MM of organic capex from 2013-17. However, these characteristics and visible growth potential are fairly reflected in MPLX's premium valuation, in our view. For Q4 2012 and 2013, our DCF/unit estimates are $0.25 and $1.41, respectively."

For an analyst ratings summary and ratings history on MPLX LP click here. For more ratings news on MPLX LP click here.

Shares of MPLX LP closed at $32.04 yesterday.

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