Oppenheimer Outperform on TPC Group

Oppenheimer & Co. is out with a research report on TPC Group

and it has an Outperform rating and a $33 price target on shares. In a note to clients, Oppenheimer & Co. writes, "In conjunction with our meetings, TPCG in an 8-K introduced "future" EBITDA guidance up 2-3x from June LTM $158M (~$12.00 in EPS). This reinforces the outstanding secular growth outlook for butadiene (BD) and TPCG's ability to capture strong economic rents through fees and strategic projects. However, near term, we believe BD prices will be pressured by recession (see 9/30, "Oct. BD Falls to $1.41"). TPCG will likely experience non-operating inventory losses, which while temporary will be significant (1c/quarter = ~$500K EBITDA). We lower 2011E EPS to $2.72 with a loss in 4Q11, and 2012E to $2.22, while our 2013E is $3.81 as inventory losses are flushed and service fees renegotiated higher. Cut PT by $16 to $33/share (15x '12E P/E)." Shares of TPCG closed at $19.83 yesterday.