Holly Energy Partners Downgraded 2 Notches by BofA/Merrill Lynch

HEP’s ratings update

Holly Energy Partners (HEP) is the midstream MLP formed by HollyFrontier (HFC) to provide refined products and crude oil transportation, terminaling, and storage services. HEP was downgraded by BofA/Merrill Lynch from “buy” to “underperform,” which is equivalent to a “sell.”

Following these rating changes, HEP had “hold” ratings from 71.0% of analysts, ”buy” ratings from 14.0%, and “sell” ratings from the remaining 14.0%.

Holly Energy Partners Downgraded 2 Notches by BofA/Merrill Lynch

HEP’s stock performance

Holly Energy Partners has risen 7.8% YTD (year-to-date). In comparison, its peers Phillips 66 Partners (PSXP) and Tesoro Logistics (TLLP) have risen 6.6% and 2.3%, respectively.

HEP is currently trading at an analyst estimated forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 10.4x, which is slightly higher than the peer median multiple of 10.0x. HEP’s average target price of $37 implies a 7.1% price return from its current price of $34.50.