Skip to main content

Market Overview

Bernstein Initiates Coverage On MLPs

Share:
Bernstein Initiates Coverage On MLPs

After a wild ride for MLP investors over the past couple of years, Bernstein has initiated coverage on the space. Analyst Jean Salisbury has some good news and bad news for MLP investors.

Good News

First, the good news is that bankruptcy fears in the space have been overblown. Even at oil prices below $40/bbl, Salisbury estimates that less than 7.0 percent of MLPs $70 billion in service revenues are at risk. Oil production volumes will likely fall this year, but midstream pipeline plays will mostly be unaffected.

Bad News

However, the bad news is that there may not be as much long-term upside to MLPs as many investors are anticipating. Salisbury believes that, after next year, the existing gas and crude infrastructure and infrastructure already in progress will be sufficient to handle forward production through 2025.

“In this context, we prefer stocks with significant committed, market-based projects (Enterprise) in the next two years which have been overly punished due to expected dividend cuts (Williams),” Salisbury explained.

Related Link: What Can Investors Expect From The New Saudi Oil Minister?

A Few Names

Williams Companies Inc (NYSE: WMB), Williams Partners LP (NYSE: WPZ) and Enterprise Products Partners L.P. (NYSE: EPD) are Bernstein’s top MLP picks and the only three Outperform-rated names covered.

While the majority of the remaining names in the space have been initiated at Market Perform, Sunoco Logistics Partners L.P. (NYSE: SXL) is the lone Underperform-rated name.

Disclosure: The author holds no position in the stocks mentioned.

Latest Ratings for WMB

DateFirmActionFromTo
Mar 2021Morgan StanleyMaintainsEqual-Weight
Mar 2021ScotiaBankUpgradesSector PerformSector Outperform
Feb 2021TD SecuritiesMaintainsBuy

View More Analyst Ratings for WMB
View the Latest Analyst Ratings

 

Related Articles (WMB + WPZ)

View Comments and Join the Discussion!

Posted-In: Bernstein Jean SalisburyAnalyst Color Long Ideas Initiation Top Stories Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
GIKColliers SecuritiesInitiates Coverage On14.0
SANWLake StreetInitiates Coverage On6.0
LILAMorgan StanleyDowngrades15.0
BEJP MorganUpgrades36.0
NEXACredit SuisseUpgrades11.0
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.
SPAC
Everything you need to know about the latest SPAC news.
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