UPDATE: Goldman Sachs Downgrades Oneok Partners LP to Sell, Lowers PT on NGL Headwinds

In a report published Wednesday, Goldman Sachs analyst Theodore Durbin downgraded the rating on Oneok Partners LP

from Neutral to Sell, and lowered the price target from $58.00 to $53.00. In the report, Durbin noted, “We downgrade ONEOK Partners (OKS) to Sell from Neutral, with 2% total return downside to our 12-month, $53 yield-based target price (vs. 8% average upside for our coverage). We believe NGL price and spread headwinds will weigh on its gathering & processing and natural liquids segment earnings, driving distribution growth below the group average vs. its recent history of above-average growth. We also see risk of further equity dilution given its large capex program and high leverage. On valuation, we assume OKS trades at a group average yield, as its slightly above average growth rate is offset by higher commodity and volume risk.” Oneok Partners LP closed on Tuesday at $57.06.