Market Overview

Morgan Stanley On Midstream Energy: 1 Upgrade, 3 Downgrades

Morgan Stanley On Midstream Energy: 1 Upgrade, 3 Downgrades
Related DM
32 Stocks Moving In Friday's Pre-Market Session
Benzinga's Top Upgrades, Downgrades For October 31, 2017
Roses Are Red, Midstream Is Green (Seeking Alpha)
Related EPD
Earnings Scheduled For January 31, 2018
Barron's Picks And Pans: Apple, PG&E, Western Digital And More
Dividend Achiever With 6.5% Yield, 54 Straight Hikes, A MLP For The Conservative Investor (Seeking Alpha)

Morgan Stanley reviewed four companies in the midstream energy segment and found Kinder Morgan Inc (NYSE: KMI) as worth upgrading from an Equal-Weight to an Overweight rating. The brokerage also boosted its price objective on the company from $23 to $24.

Analysts led by Tom Abrams cited four pieces of support for downgrading the other companies. According to Abrams, "stabilization, scarcity value diminishing, volatility, and time frames lengthening" were the reasons behind the downgrades and subsequent price tag reductions.

"We see the postmerger cancellation return of ETE/ETP and WMB/WPZ as more viable independent midstream choices for investors as cathartic for the sector. All are large components of midstream indices and, after recent financial announcements, have significantly moved the sector perception to a more stable position," said Abrams.

Related Link: Credit Suisse And Morgan Stanley Present Some Incredible Charts On The Oil Complex

Kinder Morgan

Morgan Stanley expects 2018 to usher in better credit metrics and cash flows. Therefore, the brokerage believes the stock merits re-rating.

Enterprise Products Partners L.P. (NYSE: EPD)

The lead analyst downgraded the stock from Overweight to Equal Weight. Similarly, the price objective of the stock has been slashed from $33 to $30, based on cash flow multiples reduction.

Dominion Midstream Partners LP (NYSE: DM)

This is one of three stocks to get the downgrade rating from Overweight to Equal Weight from Morgan Stanley. The brokerage also reduced the price target from $40 to $30 citing a drop in target multiple.

Magellan Midstream Partners, L.P. (NYSE: MMP)

One more stock in the downgraded list from Equal Weight to Underweight. The lead analyst cut the price tag from $73 to $69.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for DM

Feb 2018Wells FargoMaintainsMarket PerformMarket Perform
Jan 2018Stifel NicolausReinstatesBuy
Dec 2017JP MorganDowngradesOverweightNeutral

View More Analyst Ratings for DM
View the Latest Analyst Ratings

Posted-In: Morgan StanleyAnalyst Color Upgrades Downgrades Price Target Commodities Markets Analyst Ratings Best of Benzinga


Related Articles (DM + EPD)

View Comments and Join the Discussion!