Morgan Stanley double downgrades XPLR on strategic uncertainty

Investing.com -- Morgan Stanley downgraded XPLR Infrastructure LP Unit (NYSE: XIFR), formerly NEP to "Underweight" from "Overweight" and slashed its price target to $13 from $22 given uncertainty over the company's long-term strategy following a disappointing strategic review.

XPLR's decision to cut its distribution entirely and allocate funds for future obligations through 2034, along with plans for wind repowering investments, failed to provide a clear growth roadmap, the brokerage said in a note.

“We believe the strategic review's outcome was a negative and raises significant uncertainty around XPLR's longer-term strategy, growth potential and functionality, making us reluctant to expect run-off value to establish a floor for the stock,” analyst said.

The strategic review fell short of a resolution that could clearly articulate the value proposition for equity investors, Morgan Stanley (NYSE: MS) said, adding that limited growth guidance and capital allocation uncertainty raise concerns about XPLR’s future direction.

The stock has dropped about 36% since the review's conclusion, and while the firm sees some upside to the current price, it remains cautious about the company's long-term growth potential.

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