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UPDATE: Credit Suisse Upgrades Enterprise Products Partners LP Following 2014 Analyst Day

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In a report published Wednesday, Credit Suisse analyst John Edwards upgraded the rating on Enterprise Products Partners LP (NYSE: EPD) from Neutral to Outperform, and raised the price target from $71.00 to $78.00.

In the report, Credit Suisse noted, “We are raising our target price to $78 (from $71). A 1.5x distribution coverage at its current distribution growth trajectory and an investment of ~3-4x the capital to sustain that growth trajectory imply EPD has the ability to grow the distribution faster, or imply higher terminal growth rate vs most MLPs. Thus, applying a 3-stage DDM (~7%/ ~7%/2.75%) discounted at an 8.0% cost of equity capital takes us to $78 TP.

"With the 1.5x coverage, we calculate EPD could grow its distribution at 6% annually for the next 7 years with zero capital investment just by squeezing coverage. Put another way, our TP implies a ~5.75-6.0% yield on EPDs DCF/unit run rate for 4Q14 and a valuation range of $77-$80/unit for a total return of ~16%-21%, supportive of an Outperform.”

Enterprise Products Partners LP closed on Tuesday at $68.80.

Latest Ratings for EPD

DateFirmActionFromTo
Jun 2015SunTrust Robinson HumphreyInitiates Coverage onBuy
May 2015Deutsche BankInitiates Coverage onBuy
Apr 2015JP MorganMaintainsOverweight

View More Analyst Ratings for EPD
View the Latest Analyst Ratings

Posted-In: Credit Suisse John EdwardsAnalyst Color Upgrades Analyst Ratings

 

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