UPDATE: JPMorgan Downgrades Antero Midstream Partners LP (AM) to Underweight
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JPMorgan analyst Jeremy Tonet downgraded Antero Midstream Partners LP (NYSE: AM) from Neutral to Underweight.
The analyst comments "AM offers natgas G&P and water related services to its sponsor Antero Resources (UW by JPM E&P analyst Arun Jayaram) while providing exposure to AR’s Appalachian production growth. Our AM model feeds from JPM’s AR model that forecasts production growth financially motivated by unmet firm commitments at a time when drill-bit economics are weak. Moreover, given market perception of stress at Antero Resources, we see AR concerns weighing on AM performance given the significant customer concentration. Additonally, we see weaker NGL pricing increasing pressure on AR. Additionally, AM trades roughly in line with G&P peers on an EV/EBITDA basis. However, given Sponsor concerns, we believe it should trade at a discount."
Shares of Antero Midstream Partners LP closed at $4.85 yesterday.
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