UPDATE: JPMorgan Upgrades Crestwood Midstream (CEQP) to Overweight
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JPMorgan analyst Jeremy Tonet upgraded Crestwood Midstream (NYSE: CEQP) from Neutral to Overweight with a price target of $22.00 (from $15.00).
The analyst comments "Crestwood holds a diversified midstream platform with the majority of earnings generated from fee-based cash flows. For 2021, CEQP guided Arrow cash flows to remain flat, which we expect to beat to the upside, driven by a higher 4Q20 base and a slightly improved commodity outlook. However, long-term production outlook in the Bakken and PRB could threaten financial flexibility. Overall, CEQP holds significant indirect operating leverage to commodity prices. In addition, we believe CEQP will be actively monitoring opportunistic asset sales to accelerate deleveraging and maintain current distribution. While any potential negative DAPL court order could impact basin differentials, we believe increased COLT hub activity and lower break-evens on CEQP acreage would limit the impact. Lastly, the additional capex reduction and O&M savings represent positive steps towards significant FCF generation."
Shares of Crestwood Midstream closed at $20.65 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Upgrades
Related EntitiesJPMorgan, Bakken Formation, Earnings
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