[cnxvideo id=”625493″ placement=”ros”]Wednesday turned out to be a good day for the world of master limited partnerships (MLPs), even if the broader market was lower. One driving force was the lower oil inventories reported by the Department of Energy, but a set of research reports from Bernstein covering some of the top MLPs also drove interest in at least part of the sector.
One issue to consider is that many MLPs were first thought to be immune to oil prices. That notion ultimately proved false, as so many producers have had to abandon projects and as many producers have negotiated costs lower.
24/7 Wall St. wanted to cover some of these main MLP calls with Outperform ratings. We included historical and price target data on each. Also included is the slew of MLP and MLP-like entities that the firm assigned Market Perform ratings.
Enterprise Products Partners
Enterprise Products Partners L.P. (NYSE: EPD) was started as Outperform in Bernstein’s call. It was assigned a $33 price target, compared with a $25.69 prior close. This is considered one of the best MLPs of them all, and the $33 target implied an upside of about 27.5%, before considering its 6% distribution yield.
Enterprise Products has a consensus analyst price target of $31.92 and a 52-week trading range of $19.00 to $34.56. Its units were last seen trading up 1.8% at $26.16 after the call. Merrill Lynch was also recently positive on Enterprise Products.
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Williams Companies
Williams Companies Inc. (NYSE: WMB) was started as Outperform with a $25 price target. The Bernstein call implied some 30% upside from the prior $19.14 close, but that was without considering the super distribution yield.
Williams has a consensus price target of $24.69 and a 52-week range of $10.22 to $61.38. Its shares were last seen trading up 1.6% at $19.45 late on Wednesday.
Williams Partners
Williams Partners L.P. (NYSE: WPZ) was assigned an Outperform rating as well, and Bernstein gave a $40 price target. This implied upside of 48% from the $26.92 prior close, and that is without considering its double-digit distribution yield.
Williams Partners was last seen trading up 2.2% at $27.50 late Wednesday. Its consensus target price is $55.00 and its 52-week range is $12.69 to $59.44.
Kinder Morgan (the Former MLP)
Kinder Morgan Inc. (NYSE: KMI) was started as Market Perform with a $20 price target at Bernstein, but this rating’s unenthusiastic title seems almost muted considering that the prior closing price was $17.18, implying over 16% upside if the target is hit, without considering its dividend yield.
Kinder Morgan was last seen trading down 0.3% at $17.13. It has a consensus price target of $20.78 and a 52-week range of $11.20 to $42.99.
Other MLPs covered by the Bernstein note were also initiated on Wednesday.
Cheniere Energy Inc. (NYSEMKT: LNG) was started as Market Perform with a $38 price target (versus a $33.49 close). Its shares were last seen trading down 1.5% at $33.00, versus a consensus target price of $59.70.
Cheniere Energy Partners L.P. (NYSEMKT: CQP) was started as Market Perform with a $32 price target (versus a $27.55 close). Shares were up 1% at $27.82, and the consensus target was $34.73.
Energy Transfer Equity L.P. (NYSE: ETE) was started as Market Perform and was given a $15 price target (versus a $12.82 close). The stock was last seen trading up 1.9% at $13.07, and its consensus price target was $13.00.
Energy Transfer Partners L.P. (NYSE: ETP) was started as Market Perform and was assigned a $39 price target (versus a $34.77 close). The units were trading down 0.4% at $34.62 late on Wednesday, with a $38.50 consensus target price.
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Spectra Energy Corp. (NYSE: SE) was started as Market Perform and was given a $33 price target (versus a $31.39 close). The stock was last seen down 0.4% at $30.86, versus a consensus analyst target of $32.93.
Spectra Energy Partners L.P. (NYSE: SEP) was started as Market Perform with a $48 price target (versus a $45.90 close). Shares were last seen trading up 0.8% at $46.28, and the consensus target price is $53.75.
And there was also at least one very negative call, but it had no impact on the trading on Wednesday.
Sunoco Logistics Partners L.P. (NYSE: SXL) was started as Underperform with a $26 price target (versus a $27.38 close) at Bernstein. Interestingly, its units were trading up 0.8% at $27.61 late on Wednesday. The consensus target price is $33.19.
Other recent news driving MLPs of late was seen as follows:
- Three quality MLPs from Merrill Lynch with 6% distributions
- Three MLPs cut distributions and prices gained for holders
- Four MLPs still raising distributions
- Insiders bought four MLPs handily in March
As a reminder, true yields in MLPs vary from the distribution yield-equivalents often cited. If they are distributions, there is generally a taxable income component and a return of capital component that is not considered taxable.
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