UPDATE: JPMorgan Upgrades Magellan Midstream Partners (MMP) to Overweight

May 25, 2022 3:56 AM EDT
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Price: $47.52 +0.27%

Rating Summary:
    14 Buy, 14 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 12 | New: 20
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(Updated - May 25, 2022 3:57 AM EDT)

JPMorgan analyst Jeremy Tonet upgraded Magellan Midstream Partners (NYSE: MMP) from Neutral to Overweight with a price target of $57.00 (from $52.00).

The analyst comments "While inflation fears permeate the market, MMP stands well positioned to benefit from higher inflation. Already poised for a 6% tariff increase on July 1, MMP could see an even higher increase next year as YTD inflation tracks in the mid-teens. Magellan possesses best-in-class operational management, effectively limiting cost structure increases and enabling significant revenue growth to fall to the bottom line. Moreover, the $435mm independent terminal sale closing in the near term represents a key catalyst, underpinning higher buybacks. On the butane blending side, in addition to wider butane-gasoline spreads potentially benefitting 2023, the Biden administration might suspend summer blending restrictions, which would represent a notable positive for MMP. Finally, amidst a choppier market backdrop, we think MMP represents a leading relative safe haven in the MLP space, which could drive incremental interest. Overall, MMP’s best-in-class corporate governance, financial flexibility, and value-focused management team put the partnership on the short list of MLPs we would feel comfortable holding over the long term."

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 $48.83 yesterday.


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