UPDATE: Stifel Initiates Coverage on Rose Rock Midstream LP on Solid Return Potential
In a report published Monday, Stifel analyst Selman Akyol initiated coverage on Rose Rock Midstream LP (NYSE: RRMS) with a Buy rating and $39.00 price target.
In the report, Stifel noted, “We are initiating coverage of Rose Rock Midstream L.P. (RRMS), a publicly traded master limited partnership (MLP) and operator of crude assets. RRMS is a predominately fee-based partnership formed by SemGroup to own, operate, and develop midstream energy assets. The majority of the partnership's assets are located in the Cushing, Oklahoma crude oil marketing hub. Cushing is the delivery point specified in NYMEX crude oil futures contracts for West Texas Intermediate (WTI) and is currently one of the largest crude oil hubs in the United States. Additionally, the partnership has exposure to the growing production in the Bakken, DJ Basin, Niobrara Shale, Granite Wash, and Mississippi Lime via its crude oil gathering and transportation pipelines. We are initiating coverage with a Buy rating on the units and a target price of $39.00. We base our target price on a 3Q14 annual distribution estimate of $2.05 and a 5.25% targeted yield. Accordingly, we estimate price appreciation of 11.7%, and when combined with current yield of approximately 5.2%, we arrive at a total return potential of 16.9%.”
Rose Rock Midstream LP closed on Friday at $34.90.
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