UPDATE: Goldman Sachs Initiates Summit Midstream Partners at Neutral on Slow Basin Growth
Goldman Sachs initiated coverage on Summit Midstream Partners (NYSE: SMLP) with a Neutral rating and a $23 price target.
Goldman Sachs commented, "We recognize SMLP's attractive attributes, including a strong balance sheet, cash flow visibility via its highly contracted pipelines, and a 7.7% upfront yield with strong 1.2x coverage. However, we have concerns over its ability to generate sustainable long-term distribution growth from organic projects given its asset concentration in the slow growth Barnett shale and Piceance basin. Clarity on a sustainable “drop-down” strategy, along with stronger gas prices/activity would be catalysts for higher valuation."
Summit Midstream Partners closed at $20.53 on Monday.
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Tags: Goldman Sachs