UPDATE: Credit Suisse Downgrades DCP Midstream Partners LP to Neutral, Reiterates $47 PT on Valuation

In a report published Friday, Credit Suisse analyst Brett Reilly downgraded the rating on DCP Midstream Partners LP DPM from Outperform to Neutral, but reiterated the $47.00 price target. In the report, Reilly noted, “We are downgrading DPM to Neutral based on valuation. In our view, DPM units fairly reflect the company's mid- to high-single-digit distribution growth prospects. Our target price remains $47 and is based on a three-stage DDM. Our assumptions include a 9.0% discount rate, a 5.6% five-year distribution CAGR, followed by a 3.0% five-year distribution CAGR and a 1.5% terminal growth rate. Our $47 target price implies a 6.3% yield based on our forecast distribution of $2.98/unit 12 months out. Our 2013 and 2014 DCF/unit estimates decline 3% and 7%, respectively, owing to lower crude oil and NGL price assumptions. We are lowering our 2013/2014/2015 EPU Estimates to 2.05/$2.64/$3.29 (from $2.15/$3.01/$3.60) respectively.” DCP Midstream Partners LP closed on Thursday at $47.47.