NuStar Energy Gets Downgrade to Equalweight

NuStar Energy (NYSE: NS) received a downgrade from Overweight to Equalweight at Morgan Stanley. Their price target was also lowered to $61 from $64.

The downgrade was cited for three reasons: Mixed asphalt fundamentals; a lower distribution growth outlook; and lack of confidence following a subdued 2Q and a somewhat shifting asset base. The original overweight rating was based primarily on valuation and heightened asphalt expectations for 2010.

NS stock has increased only modestly at 4%, while peers have surged 13%. However, a waning economoic recovery has increased the risks for an improvement in asphalt fundamentals.

NuStar closed Friday at $59.13