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Credit Suisse's Single MLP Upgrade


In a recent report, Credit Suisse analysts looked at Master Limited Partnerships (MLPs) and gave their take on the space. Analysts issued a single MLP upgrade and made predictions for what investors can expect in 2015.

MLPs Remain Under Pressure

Analysts believe that most MLPs will remain under pressure until crude oil finds its bottom. Credit Suisse predicts that the floor in oil prices will be established in 1Q15, but they do not make a prediction about when oil will begin to rebound from that point.

Despite appealing valuations and yield spreads, Credit Suisse clients consistently indicate a desire to wait and watch the MLPs for the time being until the crude oil picture becomes clearer.


Analysts forecast 8 percent median distribution growth for their covered MLPs in 4Q14. In addition, they are predicting 20 percent earnings before interest, taxes, depreciation and amortization (EBITDA) growth in the space last quarter.

Incorporating those estimates into the 2014 yearly totals gives 6.5 percent distribution growth and 20 percent EBITDA growth for the year.

Lone Upgrade

Despite all the headwinds, analysts upgraded Energy Transfer Partners LP (NYSE: ETP) from Neutral to Outperform. The upgrade was based mostly on valuation and was accompanied by a $1 cut in price target to $77.

Related Link: How Warren Buffett Made A Wrong Bet On Oil

With Energy Transfer Partners currently trading at around $64, analysts see a favorable risk/reward balance for investors. Analysts like that the majority of the partnership's exposure is to natural gas and point out that the retail marketing part of the business offers some internal hedges to falling crude oil prices.

Latest Ratings for ETP

Aug 2018UBSMaintainsBuyBuy
Aug 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight
Mar 2018Bank of AmericaMaintainsBuyBuy

View More Analyst Ratings for ETP
View the Latest Analyst Ratings


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