UPDATE: Credit Suisse Upgrades Magellan Midstream Partners LP to Outperform, Raises PT Following Raised Guidance

In a report published Friday, Credit Suisse analyst John Edwards upgraded the rating on Magellan Midstream Partners LP

from Neutral to Outperform, and raised the price target from $55.00 to $59.00. In the report, Edwards noted, “We are raising our TP by $4, to $59, and maintaining our target yield range of 3.75%-4.0% with price range of $57-$61. We have raised our distribution growth forecast and consequently believe that investors likely bid down the yield further. We believe that MMP has NTM total return potential of 14%-21%, which justifies an Outperform rating from Neutral. MMP announced that it has allocated 10% of the capacity on Longhorn for spot market shipments which has been oversubscribed. MMP is also considering adding an add'l 50 kbpd capacity which would only cost $80mm and we estimate would add $30mm EBITDA. We are raising our FY2014 EBITDA forecast by $31mm to reflect this ‘potential' project as well as the recently announced $190mm P/L acquisition from PAA.” Magellan Midstream Partners LP closed on Thursday at $52.46.