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Tesoro Logistics Posts Strong 1Q16 Data: How Did Its Stock React?

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May. 10 2016, Updated 2:56 p.m. ET

Analyst recommendations for TLLP

Of the analysts surveyed by Bloomberg, 75% rated Tesoro Logistics (TLLP) a “buy,” while 25% rated it a “hold.” None of the surveyed analysts rated TLLP a “sell.” The consensus 12-month target price for TLLP is $55.70. Over the same period, the low and high target prices for the stock are $47 and $64, respectively. Currently, Tesoro Logistics’ stock is trading near $46.70. If it attains the median target price within a year, it could mean a 19% price return for investors.

The above table shows the recommendations and target prices for Tesoro Logistics from some of the brokers that were surveyed. Tesoro Logistics forms ~0.6% of the Guggenheim Raymond James SB-1 Equity ETF (RYJ).

As for peers, 70% analysts rated Phillips 66 Partners (PSXP) a “buy,” 75% rated PBF Logistics (PBFX) a “buy,” and 43% rated Holly Energy partners (HEP) a “buy.”

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TLLP reiterates EBITDA growth target

During the 1Q16 earnings release, Tesoro Logistics reiterated its EBITDA (earnings before interest, tax, depreciation, and amortization) target. “We remain committed to achieving our $1 billion EBITDA target by 2017 through organic growth, strategic acquisitions and drop downs from Tesoro,” said Greg Goff, chairman and CEO of TLLP’s general partner.

Tesoro Logistics continues to expect fiscal 2016 EBITDA of $735 million to $765 million before any dropdown opportunities from Tesoro.

TLLP lowers capital expenditure guidance

Tesoro Logistics lowered its capital expenditure guidance for 2016 to $275 million from the company’s original guidance of ~$500 million.

“Due to delays and deferrals of several gathering projects in both the Rockies and Bakken regions attributed to low commodity prices and the timing of spending related to the Los Angeles Refinery Interconnect Pipeline project, we are reducing our 2016 capital expectations,” said Goff.

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