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Goldman Sachs Reiterates Buy And PT Of $60 On Magellan Midstream Partners (MMP)

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Goldman Sachs reiterated its Buy rating on Magellan Midstream Partners (NYSE: MMP) in a research report published today. Goldman also left its price target on Magellan's shares unchanged at $60, after Magellan posted better than expected Q1 earnings per share results.

Goldman remains upbeat on Magellan's long-term outlook for a number of reasons. In the report, Goldman states, "We reiterate our Buy rating on Magellan as it ranks among the few MLPs with long-term, above-average distribution growth, supported by: (1) asset acquisitions, where returns are enhanced by its lack of a general partner burden; (2) tariff uplift that we forecast will provide a base growth rate of 5%-7%; and (3) upside to our petroleum product volume expectations as the domestic economy continues to recover. We forecast the company will raise distributions 8% annually over the next four years, versus 5%-6% for the group. Separately, we are growing more confident that its Longhorn Pipeline conversion/reversal will progress to construction, as Magellan confirmed producer interest remains high for a more direct route from the Permian to a more attractive refining center (and away from WTI prices)."

In yesterday's trading Magellan lost 2.39% to close the day at $57.53. Its shares regained some of their losses after rising 0.1% to $57.59 in today's pre-market session.

 

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