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TCP, EEP, and SEP: What Wall Street Analysts Recommend

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Spectra Energy Partners

The revised FERC tax ruling will likely have a negative impact on interstate pipeline operators’ earnings, which could result in downgrades and downward price revisions of a few heavy interstate pipeline operators. However, most of these pipeline operators had already adjusted their earnings guidance lower to reflect the impact of US tax cuts. Moreover, most of the negative impact could have been already priced in.

For now, we’ll look into the analyst recommendations for three major interstate pipeline operators, Spectra Energy Partners (SEP), TC PipeLines (TCP), and Enbridge Energy Partners (EEP).

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44.4% of analysts rate Spectra Energy Partners a “buy,” 38.9% rate it as “hold,” and the remaining 16.7% rate it as a “sell.” Spectra Energy Partners has already seen three rating downgrades since the start of this year. SEP’s average target price of $45.7 implies ~29% upside potential from the current price levels.

Enbridge Energy Partners

66.7% of analysts rate Enbridge Energy Partners as a “hold,” 16.7% rate it as a “buy,” and the remaining 16.7% rate it as a “sell.” EEP has seen one rating downgrade from the start of this year. EEP is currently trading below the low range of analysts’ target prices. Its average target price is $15.8, which implies ~46% upside potential from the current price levels.

TC PipeLines

58.3% of analysts rate TC PipeLines a “hold,” 25.0% rate it a “buy,” and the remaining 16.7% rate it a “sell.” The MLP hasn’t since any rating updates since the start of 2018. TCP is currently trading below the low range of analysts’ target price. Its average target price of $56 implies ~41% upside potential from current price levels.

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