UPDATE: Bank of America Upgrades Suburban Propane Partners to Buy on Growth Potential
Bank of America upgraded Suburban Propane Partners (NYSE: SPH) from Neutral to Buy and maintained a $45.00 price objective.
Bank of America noted, "We upgrade SPH to Buy (from Neutral) as we see the potential for a resumption in distribution growth following SPH's acquisition of NRGY's retail propane assets. From a valuation perspective, we see SPH's current yield of 8.5% as not accurately reflecting its growth potential, improving balance sheet, and expected lack of equity issuance. We believe there is potential for upside to distributions beginning in 2013 as SPH realizes synergies associated with the NRGY propane acquisition. SPH should also benefit from a technical perspective due to a lack of equity needs in 2013, particularly relative to some of its propane peers (i.e. APU) that have a material equity overhang."
Suburban Propane Partners closed at $41.36 on Monday.
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