UPDATE: Credit Suisse Downgrades Valero Energy Partners LP on Valuation

In a report published Wednesday, Credit Suisse analyst John Edwards downgraded the rating on Valero Energy Partners LP VLP from Outperform to Neutral, but reiterated the $38.00 price target. In the report, Credit Suisse noted, “VLP has delivered total returns of ~16% in the first two months of 2014, one of the top performers in the MLP midstream space. While we remain confident in VLP's growth story, derisked cash flow and ~20% 3-year distribution CAGR, we believe the current stock price and yield of 2.2% fairly reflects the underlying growth potential. Our drop-down forecasts a rise in drop-downs to $750mm/year in 5 years, where it will remain until the inventory of assets at VLO are dropped to VLP.” Valero Energy Partners LP closed on Tuesday at $38.22.