Credit Suisse Upgrades CST Brands As It Readies For Growth

In a note released early Friday, Credit Suisse analyst David Hartley upgraded shares of CST Brands CST from Underperform to Neutral and raised the price target from $29 to $35.

Hartley noted that his price target change is based primarily on two factors 1) the value of General Partner/Incentive Distribution Rights, which according to his preliminary estimates is ~$3.70 and 2) a higher retail valuation multiple.

Hartley added, "the GP/IDR ownership provides strong incentive for CST to be an industry consolidator post May 2015."

Looking forward, Hartley said he is waiting for more detailed information that will allow him to refine his valuation.

As a final note, Hartley commented, "Stock is not cheap at current price levels above our target price. We believe the market had already priced in an MLP event."