Market Overview

Deutsche Bank Picks Top Midstream Energy Companies


Analysts at Deutsche Bank significantly expanded coverage of their midstream energy sector, adding 17 names to their coverage universe. The analysts noted that the midstream sector has grown from 40 public names to 130 currently.

Among the bank's top picks: Energy Transfer Equity LP (NYSE: ETE), Phillips 66 Partners LP (NYSE: PSXP), Kinder Morgan Inc (NYSE: KMI) and Markwest Energy Partners LP (NYSE: MWE). The analysts chose these names because they see the most potential in "names with high growth, multi-year visibility, stable cash flows, high coverage, IG ratings, and aligned management or sponsor interests."

Deutsche Bank said that growth in oil and gas production creates a "massive need" for energy infrastructure, giving the industry a long-term secular tailwind. The analysts forecasted that the crude logistics, NGL infrastructure and large cap diversified names will be the main beneficiaries of this tailwind.

Specifically, these names include Phillips 66 Partners, Global X MLP & Energy Infrastructure ETF (NYSE: MLPX), Valero Energy Partners LP (NYSE: VLP), and Tesoro Logistics LP (NYSE: TLLP) in the crude logistics category.

In NGL infrastructure, Deutsche said that Energy Transfer Equity, Sunoco Logistics Partners L.P. (NYSE: SXL) and Markwest Energy Partners will benefit.

Finally, among large-cap diversified companies, Deutsche Bank said it prefers Kinder Morgan and Enterprise Products Partners L.P. (NYSE: EPD).

Deutsche Bank said that it was less constructive on "E&P MLPs, variable-rate refining MLPs, and gas storage names." The company initiated Sell ratings on ONEOK, Inc. (NYSE: OKE) and Oneok Partners LP (NYSE: OKS).

Latest Ratings for ETE

Oct 2018Initiates Coverage OnOutperform
Oct 2018Initiates Coverage OnBuy
Aug 2018MaintainsOverweightOverweight

View More Analyst Ratings for ETE
View the Latest Analyst Ratings

Posted-In: Deutsche BankAnalyst Color Commodities Initiation Markets Analyst Ratings Trading Ideas


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