UPDATE: Bank of America Downgrades OCI Partners

In a report published Thursday, Bank of America Merrill Lynch analyst Kevin McCarthy downgraded

from Buy to Neutral, with a $27.00 price objective. According to the report, the analysts raise their 2014 EPS estimate to $2.28 from $2.22 based on higher methanol prices, partially offset by lower ammonia “We remain constructive on growth prospects, but downgrade OCIP units to Neutral from Buy for three reasons,” the report said. “First, prices for methanol (68% of sales) may be near a peak. Second, ammonia (32% of sales) prices declined as 4Q13 progressed. Third, with units having increased 54% since the IPO on 3 October, our PO of $27 now implies total return potential of 7%, including a projected dividend yield of 9.0% that now pales vs. an average yield of 11.1% for variable-rate MLP peers.” The report went on to further assert that US methanol selling prices have increased 30% over the past year and 17% over the past three months, outpacing Brent crude oil in both periods. The 2014 forecast has been raised by $21/MT to $468 from $447. OCIP closed Wednesday at $27.66.