UPDATE: Feltl and Company Upgrades Rentech Nitrogen to Strong Buy, Lowers PT
In a report published earlier today, Feltl and Company, Inc. upgraded their rating for Rentech Nitrogen Partners LP (NYSE: RNF) from Buy to Strong Buy, but also lowered its price target to $31.09.
Feltl and Company said they upgraded their rating “on the basis of improved visibility for strong profitability and an attractive valuation relative to peers. When we first initiated coverage on RNF back in March we estimated distributions earned in the calendar 2012 (paid out through early 2013) would total $2.40. RNF is now guiding to $2.86, and as can be seen below we believe EPS at RNF will actually exceed $3.00 in 2012. Also, valuations of the two most closely associated peers – Terra Nitrogen (TNH – not rated) and CVR Partners (UAN – not rated) are markedly higher, with TNH trading at a yield of 7.8% and UAN at 9.2%. We assume that RNF should trade at least at a yield comparable to UAN given its leverage from natural gas and its margin-enhancing location in the central Corn Belt (East Dubuque, Illinois). Hence, our price target of $31.09 reflects a yield of 9.2% on RNF's self-projected distribution of $2.86.”
Rentech Nitrogen Partners LP closed yesterday at $22.75.
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