Credit Suisse Upgrades Enterprise Products Partners To Outperform

Over the past three months, shares of Enterprise fell more than 6 percent versus S&P 500's +3.27 percent. The brokerage, however, maintains its $34 target price, implying a potential return of about 36 percent.

"We believe EPD offers a solid risk/reward proposition given the MLP's conservative distribution policy (~1.30x coverage in 2016–2019), high quality & interconnected asset footprint, and best in class management team," analyst John Edwards wrote in a note.

Related Link: Evercore ISI Group Initiates Coverage On Enterprise Products At Buy

Meanwhile, the market is still pricing the possibility of Enterprise buying Williams Companies Inc WMB at an aggressive price, despite both sides confirming that the M&A talks have ended.

"We believe if talks resume EPD is unlikely to consider terms which would be value destructive or dilutive," Edwards continued.

"EPD has lot of legroom before a prospective deal becomes dilutive, suggesting that investor concerns on this topic are overblown," the analyst added.

In addition, Edwards pointed to the company's $5 billion plus backlog, which provides a solid basis for future growth as well as his five-year distribution CAGR of 5.5 percent. The analyst noted that the company gets stable cash flows from its suite of inter-connected assets, while additional upside would come from smaller opportunistic M&A and crude/condensate side.

Shares of Enterprise Products closed Friday's regular trading session at $26.01.

Full ratings data available on Benzinga Pro.