Morgan Stanley Opens Research Tactical Idea on Chesapeake Midstream Partners

Morgan Stanley has opened a research tactical idea on Chesapeake Midstream Partners

believing that the share price will rise in absolute terms over the next 60 days. In the report, Morgan Stanley writes, "This is because of a completed acquisition. We have revised our '12/'13 EBITDA estimates to $478m and $614m respectively and our '12/13 distribution growth estimates of 15%/14% (from 11%/8%) following the acquisition of CHK's Marcellus gathering assets last week. In addition to immediate accretion (13.2% in '12), this transaction offers the benefits of diversification (both geographic and customer), a new organic growth platform, and should begin to re-focus investors on growth. While we await further third party execution to revisit our rating, Street numbers need to increase materially (concensus EBITDA at $420m and $486m for '12/'13)." Morgan Stanley maintains its Equal-weight on Chesapeake Midstream Partners, which is currently trading up $0.18 from Friday's $29.00 closing price.