UPDATE: Citigroup Cuts PT to $9 on Ferrellgas Partners LP
Citigroup lowers its price target to $9 from $16 on Sell-rated Ferrellgas Partners LP (NYSE: FGP) as the company resorts to raising equity and leverage of its account receivables amid a warm-weather-related difficulties in its operating environment.
Citigroup says, "Taking into consideration continued warmer than normal weather, disappointing unit margins, limited liquidity, and growing leverage we expect that FGP will need to suspend its distribution over the next 12 months. As a result, we are now basing our valuation for FGP on a 10x 2013 EBITDA multiple, which we believe approximates the partnership's liquidation value. Investors should note that this valuation has downside as our forward 2013 estimates assume a recovery from 2012."
FGP closed at $16.69 a share on Friday.
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