Of the analysts surveyed by Bloomberg, 40% rate AmeriGas Partners (APU) a “buy,” 40% rate it a “hold,” and 20% rate it a “sell.” The consensus target price for APU is $43.60. From its current price of $43.98, this would mean a downside of 0.9% in the next twelve months. APU accounts for ~0.06% of the PowerShares Dividend Achievers ETF (PFM).
Ferrellgas Partners (FGP) has received a “hold” rating from 67% of the analysts and a “sell” rating from the remaining 33%. None of the analysts surveyed rated the MLP a “buy.” The consensus target price for Ferrellgas Partners is $17.40. FGP currently trades at $19.60. This implies a downside of 11% in the next twelve months.
Of the analysts surveyed, 22% rated Suburban Propane Partners (SPH) a “buy,” 67% rated it a “hold,” and 11% rated it a “sell.” The consensus one-year price target for SPH is $32.60. This target implies a price return of 4% in a year from the MLP’s current market price of $31.31.
All the analysts surveyed rated Star Gas Partners (SGU) a “hold.” The consensus price target for the MLP is $11, implying a price return potential of 25% from its current market price of $8.80.
Outlook for propane MLPs
Warmer-than-normal winter temperatures have negatively impacted the performance of propane MLPs over the last two fiscal quarters. AmeriGas Partners lowered its EBITDA (earnings before interest, tax, depreciation, and amortization) target for fiscal 2016 to $575 million–$600 million, from $660 million–$690 million that the company announced previously.
Ferrellgas Partners also lowered its EBITDA guidance for fiscal 2016 to $360 million–$375 million, which is down from the previously announced $400 million–$420 million.
While the price return potential for these MLPs looks limited based on analyst recommendations, they could still be attractive for some investors looking for yields.