Barclays Reinstates Coverage On Sunoco
Richard Gross of Barclays on Thursday reinstated coverage of Sunoco LP (NYSE: SUN) with an Equal-weight rating and $54 price target following the MACS drop down from parent Energy Transfer Partners (NYSE: ETP) and the Aloha Petroleum acquisition.
“Sunoco benefits from relatively stable cash flows and solid growth visibility,” Gross wrote. “Cash flow stability is supported by long-term, fee-based contracts for a significant portion of its business, consistent fuel margins and the support of a large-cap investment grade parent.”
Gross adds that Sunoco is well positioned to achieve a 12.5 percent growth from a $4.0 billion to $4.5 billion drop down inventory, organic capital expenditure and third-party acquisitions. However, the analyst adds that the company's favorable growth profile is “somewhat reflected” in the partnership's unit price.
Gross states that shares are currently trading at a yield of 4.4 percent, a “sizeable” premium to 6.3 percent peers and 6.6 percent MLP coverage universe.
A $54 price target is based on a 12-month distribution run rate of $2.50 per unit and a 4.6 percent yield.
Latest Ratings for SUN
Date | Firm | Action | From | To |
---|---|---|---|---|
Feb 2022 | Mizuho | Maintains | Neutral | |
Feb 2022 | Citigroup | Downgrades | Buy | Neutral |
Jan 2022 | Credit Suisse | Maintains | Neutral |
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Posted-In: Aloha Petroleum Barclays energy transfer partners MLP Richard Gross SunocoAnalyst Color Analyst Ratings