Enterprise Product Partners
In this article, we’ll look at the MLPs (master limited partnerships) with high upside potential from their current price levels. Enterprise Product Partners (EPD), the largest MLP in terms of market capitalization, has a track record of consistent distribution growth and financial discipline.
Of the analysts surveyed by Reuters, 93.0% rated EPD as a “buy,” and the remaining 7.0% rated it as a “hold.” EPD’s average target price of $32.93 implies a 23.0% price return from its current price of $26.80.
EQT Midstream Partners
EQT Midstream Partners (EQM) has low leverage, strong distribution growth guidance, and significant expansion opportunities. The partnership has “buy” ratings from 89.5% of analysts. It has an upside potential of 25.2% from its current levels.
MPLX LP (MPLX) is one of the leading natural gas gatherers and processors in the US. The partnership has significant expansion opportunities in the prolific Marcellus Shale play. MPLX recently formed a JV (joint venture) with Antero Midstream Partners (AM) for expansion of the Sherwood Processing Facility.
Plus, 84.2% of analysts surveyed rated MPLX as a “buy,” and the remaining 15.8% rated it as a “hold.” Its average target price of $43.10 implies a 30.9% price return.
Energy Transfer Partners
Energy Transfer Partners (ETP) was upgraded to a “buy” by three research firms since the merger completion—Bernstein, Stifel, and Credit Suisse. At a broader level, 86% of analysts currently rate Energy Transfer Partners as a “buy,” and the remaining 14% rate it as a “hold.”
The partnership is expected to benefit from the strong Permian presence. ETP’s target price of $30.80 implies a 41.4% price return from its current price level of $21.70.
Hi-Crush Partners (HCLP), the MLP involved in frac-sand production, is expected to benefit from the strong US drilling activity. Of the analysts surveyed, 100% rated HCLP as a “buy.” HCLP’s average target price of $23.80 implies an 89.6% price return in the next 12 months from its current price of $12.60.