UPDATE: Morgan Stanley Initiates Coverage on Dynagas LNG Partners LP with Equal-Weight Rating, $21.50 PT on Attractive Yield and Growth

In a report published Monday, Morgan Stanley analyst Fotis Giannakoulis initiated coverage on Dynagas LNG Partners LP DLNG with an Equal-Weight rating and $21.50 price target In the report, Morgan Stanley “Initiating coverage of Dynagas at Equal-weight with a $21.5 price target. DLNG's current fleet of 3 modern LNG carrier offers annualized distribution of $1.46 per unit that is well supported by solid cash flow with upside potential and 1.1x common unit coverage. As the fleet grows through a series of dropdowns, we expect distribution gradually to rise at a rate of ~10% per year and the stock to trade based on a 12-month forward dividend yield of ~7.5%, resulting in our $21.5 PT for a total return of ~20%. Our $26 bull case assumes higher distribution growth to ~$1.70 at a yield below 7%. Our bear case is based on an NAV of $14, representing the fleet liquidation value.” Dynagas LNG Partners LP closed on Friday at $19.46.