UPDATE: Morgan Stanley Initiates Overweight, $17 PT on PetroLogistics; Propylene Discount to Crude Likely to Narrow
Morgan Stanley initiates its coverage on PetroLogistics (NYSE: PDH) with an Overweight rating and a price target of $17.
Morgan Stanley notes, "MLP PetroLogistics profits from the spread between propylene prices and propane costs. While this spread has narrowed recently, propane should remain weak through 1H13 and propylene should recover over the next 6 months. Our base-case scenario suggests an attractive ~11% NTM yield."
PDH closed at $15.15 on Tuesday.
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