TEP has fallen 29% in a year
Tallgrass Energy Partners (TEP) stock has been volatile in 2018. The stock fell steeply at the start of February after the company announced that it was evaluating reorganization transactions to simplify TEP’s and Tallgrass Energy GP’s (TEGP) structures.
Investors are likely concerned that this may include a distribution cut for TEP, which is currently trading at a yield of ~10%. The company expects that the evaluation, as well as any resulting transaction, could complete by the end of 2018.
Tallgrass Energy Partners increased its per unit distribution by 2.1% sequentially in 4Q17. Tallgrass stock has fallen ~29% in the last year. In comparison, Enbridge Energy Partners (EEP) and Western Gas Partners (WES) have fallen 31% and 26%, respectively, over the same period. The Alerian MLP ETF (AMLP) has fallen 22% in the last year. TEP has fallen 16% year-to-date.
TEP’s moving averages
Tallgrass Energy Partners is trading 12% below its 50-day moving average and 17% below its 200-day moving average. Its 200-day moving average may act as a resistance level for it in the near term.
Analysts surveyed by Reuters seemed bullish on Tallgrass Energy Partners. Of the analysts, 57% rated the MLP as a “buy,” and the remaining 43% rated it as a “hold.” None of the surveyed analysts rated Tallgrass Energy Partners as a “sell.” The consensus target price for Tallgrass Energy Partners is $46.5, which implies a potential upside of 21% over the next year from its current price of $38.35.
In comparison, just 17% of surveyed analysts rated Enbridge Energy Partners as a “buy.” Nearly 53% of analysts rated Western Gas Partners as a “buy.”
Next, let’s see how short interest in Tallgrass Energy Partners has changed recently.