UPDATE: J.P. Morgan Reiterates Neutral Rating, Raises PT on Magellan Midstream Partners

In a report published Monday, J.P. Morgan & Co. reiterated its Neutral rating on Magellan Midstream Partners LP

, and raised its price target from $75.00 to $87.00. J.P. Morgan noted, “We rate MMP Neutral with a YE13 $87/unit price target. Magellan's refined product pipeline network serves favorable demographics across the southern US while the partnership's expanding crude oil platform services growing basins. Moreover, stable, fee-based revenue drives ~85% of partnership operating margin. Due to acquiring the GP in 2009, MMP enjoys one of the lowest costs of capital in the MLP space, allowing the partnership to outbid competitors for choice assets (2010 BP acquisition), while still achieving the desired accretion. However, the crude oil logistics business is a relatively new business for Magellan and we believe there is an element of execution risk to the partnership's expansion plans. Additionally, MMP enjoys one of the lowest yields in the space (premium valuation) and we currently see limited ability for incremental yield compression in the near term. As such, we suggest waiting for a more attractive entry point.” Magellan Midstream Partners LP closed on Friday at $84.70.