Jefferies Downgrades EnLink, Yet Raises Price Target

Jefferies has downgraded EnLink Midstream Partners LP (NYSE: ENLK) and EnLink Midstream LLC (NYSE: ENLC) to Hold from Buy on valuation. But, the brokerage raised the price target of both stocks.

Shares of EnLink Midstream Partners LP are up about 100 percent since February lows, while shares of EnLink Midstream LLC have surged about 130 percent off their February nadir.

"While we believe sentiment has decidedly shifted to positive territory following the rout in midstream earlier this year, we believe the risk/reward skew is more balanced & see fundamental valuation met," analyst Christopher Sighinolfi wrote in a note.

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However, the analyst raised the price targets of EnLink Midstream Partners LP to $17 from $13, and EnLink Midstream LLC to $15 from $13.

EnLink Midstream Partners LP reported first quarter adj. EBITDA of $195.0 million, above Jefferies' $180.2 million forecast. However, the analyst noted that "other" items of $14.4 million, primarily driven by a $10.9 million adjustment for derivatives marked-to-market, accretion expenses, reimbursed employee costs, and acquisition costs, accounted for a majority of the beat.

Shares of EnLink Midstream Partners LP closed Tuesday's regular trading at $17.06, while EnLink Midstream LLC closed at $16.73.