Goldman Sachs Upgrades Chesapeake Midstream Partners (CHKM) to Conviction Buy

Goldman Sachs upgraded Chesapeake Midstream Partners (NYSE: CHKM) from Neutral to Conviction Buy with a price target of $30, suggesting 20% upside.

The firm sees Chesapeake Midstream Partners generating the highest distribution growth rates among MLPs under coverage. The firm forecasts 13%/13% 1-yr/3–yr growth, which is 700 bp above the group average.

Goldman cited three key reasons to buy CHKM: 1. "Drop-downs" to drive above-average growth. The firm sees parent Chesapeake (NYSE: CHK) selling or "dropping" $400M in assets per year down to CHKM; 2. CHKM has a low current cost of capital; 3. Parent CHK is motivated to sell assets and will be motivated to "drop" assets down to CHKM in exchange for cash.

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

Shares of Chesapeake Midstream Partners closed at $26.25 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Freedom Broker Upgrades Walmart (WMT) to Buy
• Seaport Global Securities Upgrades Analog Devices (ADI) to Buy, 'appears to be entering the sweet part of the cycle'
• Morgan Stanley Upgrades Megaport Ltd. (MP1:AU) (MGPPF) to Overweight