UPDATE: Bank of America Merrill Lynch Reiterates Buy Rating, Raises PT on Tesoro Logistics

Loading...
Loading...
In a report published Wednesday, Bank of America Merrill Lynch reiterated its Buy rating on Tesoro Logistics LP
TLLP
, and raised its price target from $37.00 to $47.00. BofA Merrill Lynch noted, “We are raising estimates to incorporate over $1.3bn in recently announced asset drop-downs to TLLP from its general partner (GP), Tesoro Corp. (TSO), planned for completion by 2014. With its 2Q12 earnings report on 1 August, TSO announced plans to drop-down its Long Beach marine terminal and Los Angeles short-haul pipelines to TLLP in 3Q12 and its Anacortes unit train unloading facility in 4Q12. We estimate the price of these drop-downs at ~$380mn based on a 9.5x multiple on $40mn in estimated annual EBITDA, in line with management EBITDA guidance. In addition, Monday before market open, TSO announced a $2.5bn acquisition (including working capital) of BP's Southern CA refining and marketing business, and plans to drop-down ~$1bn in associated logistics assets to TLLP in the twelve months following acquisition close, which is expected before mid-2013. Tesoro Logistics LP closed on Tuesday at $41.56.
Posted In: Analyst ColorPrice TargetReiterationAnalyst RatingsBank of America Merrill Lynch
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...