UPDATE: Credit Suisse Downgrades Western Gas Partners To Neutral on Valuation
Credit Suisse assumes its coverage on Western Gas Partners (NYSE: WES) with a Neutral rating (previously Outperform) with a $48 price target as it believes share valuation is full.
Credit Suisse comments, "WES offers investors a best-in-class distribution growth profile. WES' growth is fueled by (1) the dropdown of a large and growing number of midstream assets from Anadarko (APC) and (2) its recent addition of organic growth into the strategy. The addition of organic growth to the platform is a significant step for WES which will further accelerate near-term growth, diversify the company's cash flow stream and improve the sustainability of distribution growth over the long-term. In addition to the company's attractive growth prospects, WES is prudently managed. The majority of WES' cash flow is derived from fee-based activities, and the company maintains a solid balance sheet and relatively high distribution coverage ratio. We are confident WES has the qualities to deliver "top-quartile" distribution growth for the foreseeable future, however our Neutral rating reflects the stock's fair valuation, in our view."
WES closed at $45.03 on Wednesday.
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