UPDATE: JP Morgan Downgrades Oiltanking Partners to Neutral
JP Morgan cuts its rating on Oiltanking Partners (NYSE: OILT) from Overweight to Neutral and cuts its price target from $30 to $27 following the run on shares since the IPO.
JP Morgan comments, "Since October 14, 2011, OILT has outperformed the AMZX by 13% (+26% vs +13%). Moreover, since going public on July 7, 2011, OILT has produced a total return of +46%, versus +10% for the AMZX. Currently, the partnership has one of the lowest yields (premium valuation) in our MLP coverage universe. Moreover, OILT's EV to LP's EBITDA multiple is one of the richest among peers at ~15x (peer median of ~14x). In addition, other O/W rated names under coverage have similar or higher yields (cheaper valuations) while offering more growth, such as PAA with a 5.2% yield and 8% growth. As such, we see better total return propositions from other names under coverage."
OILT closed at $30.45 on Friday.
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