Morgan Keegan lowers its rating on Enbridge Energy EEP to Perform from Outperform on increased capital expenditures and slower distribution growth.
Morgan Keegan says, "Enbridge Energy Partners (EEP) provided guidance Monday
in which cap ex was $600mm or 40% above forecast, our derived EBITDA guidance was
7% below forecast, EEP held its distribution vs our 2.3% Q/Q growth forecast, and it
reaffirmed its 2%-5% distr growth guidance. With distr growth below the average MLP and thin coverage forecast for 2012, we are holding our target yield range at 6.0%-6.5% giving a valuation range of $34-$37 and a target price of $36."
EEP closed at $33.37 a share on Monday.
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