Short Term Headwinds For EXLP, Long Term Growth Story Intact

Analyst Richard Gross of Barclays Capital maintains his "equal weight" rating on Exterran Partners (NASDAQ: EXLP). The target price for EXLP has been raised from $17.50 to $23.00.

According to Barclays Capital, Exterran Partners may witness weak fundamentals in its US compression business throughout 2010 due to the deterioration in natural gas drilling and production activities. EXLP’s strong long-term growth prospects, however, remain intact, the analyst says.

EXLP’s stock would trade at a premium valuation, once there is an improvement in natural gas fundamentals during late 2010 or 2011, the analyst says. The analyst expects Exterran Partners to benefit from its low direct commodity price exposure and asset drop downs from its parent.