UPDATE: Oppenheimer Initiates Coverage on Genesis Energy LP on Fair Valuation

In a report published Wednesday, Oppenheimer analyst Bernard Colson initiates coverage on

with a Perform rating. In the report, Oppenheimer noted, “We initiate coverage of Genesis Energy (GEL) with a Perform rating and do not assign a price target. Crude oil infrastructure fundamentals remain positive, and GEL appears well positioned to capitalize on significant production growth over the next 3-5 years. We like the refinery services business and believe it is attractive and relatively misunderstood. Despite a low percentage of fee-based cash flow, management has been effective in reducing cash flow volatility and driving brisk distribution growth. That being said, we believe valuation is fair, and that GEL will likely need to access the equity market to permanently finance its recent acquisition of barges from Hornbeck. We would watch GEL from the sidelines.” Genesis Energy LP closed on Tuesday at $48.82.