Market Overview

Deutsche Bank's Mehrotra Downgrades Dynagas: Here's Why

Share:

Deutsche Bank’s Amit Mehrotra downgraded the rating on Dynagas LNG Partners LP (NYSE: DLNG) from Buy to Hold, while reducing the price target from $25 to $9.

Mehrotra explained that the downgrade in the rating was due to expectations of limited upside to the stock valuation and a significant derating in the MLP segment, rather than company-specific issues, given that management has been executing according to plan.

The company reported its 4Q results in line with the expectations, which the analyst stated was not surprising, given that there was high visibility into Dynagas’ cash flows.

Management reaffirmed its intent to recommend a quarterly increase in distribution to the Board, of 4-6 percent, starting 1Q.

According to the Deutsche Bank report, “The increase reflects the successful drop down of LNG carrier “Lena River” for $240M, which was funded primary with new debt and preferred units.”

This distribution growth would imply annualized distribution of $1.77 per unit in 2016, which translates to 20 percent yield on current share price.

However, Mehrotra expressed uncertainty regarding the company’s mid-term outlook, saying that Dynagas would be unable to influence drop down in the current environment, while management’s visibility beyond 2017 was limited, with 6 of the company’s LNG charters due to expire in 2017.

Latest Ratings for DLNG

DateFirmActionFromTo
Oct 2020JefferiesMaintainsHold
Jan 2019JefferiesDowngradesBuyHold
Jan 2019B. Riley FBRDowngradesBuyNeutral

View More Analyst Ratings for DLNG
View the Latest Analyst Ratings

 

Related Articles (DLNG)

View Comments and Join the Discussion!

Posted-In: Amit MehrotraAnalyst Color News Short Ideas Downgrades Price Target Analyst Ratings Trading Ideas

Latest Ratings

StockFirmActionPT
DISCitigroupMaintains175.0
AYLANoble Capital MarketsInitiates Coverage On29.0
SHOPSusquehannaInitiates Coverage On950.0
SICraig-HallumInitiates Coverage On50.0
WORKStephens & Co.Downgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com