UPDATE: JPMorgan Downgrades Magellan Midstream Partners (MMP) to Neutral

March 12, 2021 4:45 AM EST
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Price: $44.69 -1.24%

Rating Summary:
    16 Buy, 14 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 17 | Down: 14 | New: 42
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(Updated - March 12, 2021 5:08 AM EST)

JPMorgan analyst Jeremy Tonet downgraded Magellan Midstream Partners (NYSE: MMP) from Overweight to Neutral with a price target of $50.00 (from $55.00).

The analyst comments "MMP’s best in class corporate governance, financial flexibility, and value focused management team puts the partnership on the short list of MLPs we feel comfortable holding for the next ten years. However, compared to most other MLPs in our coverage, MMP possesses less torque to rising oil prices, and we see a lack of nearterm catalysts. Additionally, recent 2021 guidance screening below expectations highlights headwinds for the business, including a weak blending environment, crude oil contract rolls, and modest incremental benefit from the 2020 West TX refined product pipeline expansion. While the weak blending environment may appear transitory, other headwinds could persist, and we expect estimates already price in a 2022 recovery, with 2022 street median EBITDA notably above 2021. MMP also possesses a valuation premium to the space on both EV/EBITDA and FCF yield metrics. In today’s environment, we see the potential for commodity price (direct + indirect) sensitive names to outperform working against MMP here, especially given MMP’s loftier valuation. Accordingly, we downgrade MMP to Neutral from Overweight."

For an analyst ratings summary and ratings history on Magellan Midstream Partners click here. For more ratings news on Magellan Midstream Partners click here.

Shares of Magellan Midstream Partners closed at $45.10 yesterday.


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