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63% of Analysts Rate AmeriGas Partners as a ‘Hold’

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Nov. 10 2017, Updated 9:40 a.m. ET

Analyst recommendations

Of the analysts surveyed by Reuters, 12.5% rated AmeriGas Partners (APU) as a “buy,” 62.5% rated it as a “hold,” and 25% rated APU as a “sell.” The consensus target price for APU is $45. Its units are currently trading at $44.3. If APU attains its target price, it would mean nearly 2% upside from current levels.

In comparison, nearly 17% of analysts rated Ferrellgas Partners (FGP) as a “buy,” and 14% rated Suburban Propane Partners (SPH) as a “buy.”

The above graph compares analysts’ recommendations for AmeriGas Partners, Ferrellgas Partners, and Suburban Propane Partners.

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Outlook

AmeriGas Partners provided adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) guidance in the range of $650 million to $690 million for fiscal 2018. The guidance assumes normal weather based on a 15-year average. The company believes this is more accurate than the previously used 30-year average. The 15-year average is ~3% warmer than the 30-year average.

AmeriGas Partners is focused on using improved technology to enhance customer experience and reduce costs, which may position it better for future growth. Suburban Propane Partners is scheduled to report its fiscal 2017 results on November 16, 2017.

For a more detailed comparative analysis of the propane MLPs, read APU, FGP, SPH, and SGU: Analyzing Prospects for the Propane MLPs.

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