UPDATE: Credit Suisse Downgrades Tesoro Logistics LP to Neutral; Growth is Fairly Discounted

Credit Suisse downgraded Tesoro Logistics LP

from Outperform to Neutral and raised the price target from $49.00 to $53.00. Credit Suisse analyst Brett Reilly commented, "In our view, TLLP's top-tier distribution growth prospects are fairly reflected in units at current prices. The upcoming step change in TLLP's cash flow has been well telegraphed and is well understood by the market. Beyond the near-term dropdown growth, we estimate TLLP would need to execute ~$750mm dropdowns per year in order to warrant further outperformance. In our view, a dropdown run-rate of ~$400mm/yr is more reasonable based upon the parent's remaining ROFO assets and potential organic growth projects." Tesoro Logistics LP closed at $54.69 on Tuesday.