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Wunderlich Expects Strong Distribution Growth From Magellan Through 2013


Wunderlich Securities has published a research report on Magellan Midstream Partners (NYSE: MMP) and has initiated coverage on the company with a Buy rating.

In the report, Wunderlich writes "The partnership's distribution growth over the next several years should be strong at an estimated 4% in 2010, 6.8% in 2011, and 6.3% in 2012. The partnership is well-positioned to take advantage of its lower cost of capital, in our opinion. The balance sheet and estimated coverage ratios demonstrate that the partnership is financially strong. Magellan should continue to grow through a combination of organic growth projects and strategic acquisitions, in our opinion. The partnership has an ongoing, active organic growth program and recently reiterated that it has $500 million of potential projects under development. Over the last two years, the partnership has closed approximately $600 million in acquisitions."

Wunderlich has also issued a $64 price target on Magellan Midstream Partners, which closed yesterday at $55.76.


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