Goldman Reinstates Energy Transfer Equity At Neutral

While Energy Transfer Equity LP ETE has solid fundamentals, these are already baked into the share price, Goldman Sachs’ Theodore Durbin said in a report. He reinstated coverage of the company with a Neutral rating and a price target of $17.

Positives

Energy Transfer Equity offers “a comprehensive footprint of well-positioned, integrated midstream assets, with a visible backlog of largely fee-based projects expected to come online in the next few years,” analyst Theodore Durbin mentioned.

Moreover, Energy Transfer Equity’s recent preferred offering would lend increased financial flexibility. Lake Charles LNG could be a potential positive catalyst, since the market is likely assigning “little credit” to the proposed $8.6bn export project, Durbin noted.

Negatives

The analyst stated, however, that there were “several negatives to the story,” including high cost of capital at its subsidiaries and high leverage.

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