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MLP Rating Updates for Week Ended January 5

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Suburban Propane Partners

Suburban Propane Partners (SPH), the MLP involved in retail marketing and the distribution of propane, was upgraded by UBS last week, which ended on January 5, 2017. It upgraded SPH to a “buy” from a “neutral,” which is equivalent to a “hold.” UBS also increased SPH’s target price to $29 from $26. About 71.4% of the analysts surveyed by Reuters rate SPH a “hold,” while the remaining 28.6% rate it a “buy.” SPH’s average target price of $27.70 implies a ~3% upside potential from the current price levels.

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Western Gas Equity Partners

Western Gas Equity Partners (WGP), the MLP GP (general partner) of Western Gas Partners (WES), saw two rating updates last week. UBS raised WGP to a “buy” from a “neutral,” and Credit Suisse initiated coverage on WGP with a “buy” rating. About 56.3% of analysts surveyed by Reuters rate WGP a “buy,” and the remaining 43.7% rate it a “hold.” WGP’s average target price of $46.90 implies a ~15% upside potential from the current price levels.

Westlake Chemical Partners

Westlake Chemical Partners (WLKP), an MLP formed by Westlake Chemical (WLK) to own, operate, and acquire ethylene production facilities, saw a target price revision last week. Deutsche Bank increased WLKP’s target price to $28 from $22 while maintaining a “buy” rating. About 57.1% of analysts rate WLKP a “buy,” and the remaining 42.9% rate it a “hold.” Its average target price of $26.10 implies a ~5% upside potential from the current price levels.

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Tallgrass Energy Partners

Tallgrass Energy Partners (TEP), the midstream MLP involved mainly in crude oil and natural gas gathering, transportation, and storage, saw three rating updates last week. They included a downgrade, a new coverage initiation, and a price target revision.

  • S Capital Wealth Advisors downgraded TEP to a “hold” from “overweight,” which is equivalent to a “buy.”
  • Credit Suisse initiated coverage on TEP and its GP, Tallgrass Energy GP (TEGP), last week. It assigned a “neutral” and “underperform” rating to TEP and TEGP, respectively. An “underperform” rating is equivalent to a “sell.”
  • Stifel cut TEP’s target price to $57 from $59.

About 57.1% of analysts rate TEP a “hold,” and the remaining 42.9% rate it a “buy.” TEP is currently trading below the low range ($48) of analysts’ target price. TEP’s average target price of $55.90 implies a ~25% upside potential from the current price levels.

Archrock Partners

Archrock Partners (APLP) saw several rating updates last week after its sponsor, Archrock (AROC), announced the acquisition of the limited partnership. APLP’s last week’s rating updates include the following:

  • RBC Capital cut APLP to “sector perform” from “outperform” and lowered its target price to $15 from $19.
  • JPMorgan cut APLP to “neutral” from “overweight” and lowered its target price to $16 from $19.
  • Capital One Securities cut APLP’s target price to $15 from $17.

About 83.3% of analysts rate APLP a “hold,” and the remaining 16.7% rate it a “buy.” Its average target price of $16.30 implies a ~21% upside potential from the current price level.

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