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UPDATE: Morgan Stanley Initiates Coverage on QEP Midstream Partners on Balanced Outlook

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In a report published Tuesday, Morgan Stanley analyst Stephen J. Maresca initiated coverage on QEP Midstream Partners LP (NYSE: QEPM) with an Equal-Weight rating and $25.00 price target.

In the report, Morgan Stanley noted, “QEPM is well structured with fee-based contracts, visible growth opportunities via drop-downs, and an unlevered balance sheet. Furthermore, QEP has incentives to grow the partnership to pay down debt, free up drilling capital, and improve valuation. This, combined with the benefits of QEPM being an early stage partnership (low EBITDA base, low GP burden), positions QEPM to deliver low- to mid-double-digit distribution growth (MSe 3-year CAGR of 13.7%) and a solid total return. However, we acknowledge execution risk due to 1) potential cash flow risk around the base business given limited volumetric protection 2) the readiness of certain assets at QEP to drop down to QEPM.”

QEP Midstream Partners LP closed on Friday at $22.65.

Latest Ratings for QEPM

DateFirmActionFromTo
Jun 2014JP MorganMaintainsNeutral
Jun 2014Seaport GlobalInitiates Coverage OnNeutral
Dec 2013JP MorganDowngradesOverweightNeutral

View More Analyst Ratings for QEPM
View the Latest Analyst Ratings

 

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

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