UPDATE: Morgan Stanley Initiates Coverage On Enable Midstream Partners LP On Positive Outlook

In a report published Monday, Morgan Stanley analyst Brian Lasky initiated coverage on

with an Equal-Weight rating and $28.00 price target. In the report, Morgan Stanley noted, “We see ENBL as a relatively attractive large-cap holding with size and scale, financial flexibility (~3.0x net debt/EBITDA and ~1.2x distribution coverage), and a 10.6% distribution growth CAGR over the next three years. We expect upside from further project identification — particularly in the SCOOP (South Central Oklahoma Oil Province) and as natgas supply/demand trends shift in the Mid-Con Region — and/or from M&A. We see some execution risk given the positioning of the legacy asset base and lack of diversified growth opportunities in the absence of drop downs. With the stock up ~29% since the April IPO and trading at a 4.6% yield and 16.6x 2015 P/DCF (vs. peers at 5.1% and 17.0x), we think the units are fairly priced.” Enable Midstream Partners LP closed on Friday at $25.89.