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UPDATE: Morgan Stanley Upgrades Spectra Energy Partners to Equal-Weight Following Valuation Uplift

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In a report published Wednesday, Morgan Stanley analyst Stephen J. Maresca upgraded the rating on Spectra Energy Partners (NYSE: SEP) from Underweight to Equal-Weight, and raised the price target from $37.00 to $42.00.

In the report, Morgan Stanley noted, “Underweight rating no longer warranted given valuation uplift from drop downs. Our thesis had been that investors are paying a premium (5.4% yield and 17.0x 2013E P/DCF vs. MS averages of 5.9% and 15.2x, respectively) for a stable asset base, quality balance sheet, and large parent (SE), but getting subpar distribution growth (~4% distribution growth) and limited visibility with waning cash coverage. While the possibility for dropdowns (from SE) has loomed, the execution has been underwhelming (fewer dropdowns and expensive multiples).”

Spectra Energy Partners closed on Tuesday at $37.19.

Latest Ratings for SEP

DateFirmActionFromTo
Aug 2018Morgan StanleyMaintainsUnderweightUnderweight
Aug 2018BarclaysMaintainsEqual-WeightEqual-Weight
Aug 2018Stifel NicolausMaintainsHoldHold

View More Analyst Ratings for SEP
View the Latest Analyst Ratings

 

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Posted-In: Morgan Stanley Stephen J. MarescaAnalyst Color Upgrades Analyst Ratings

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