Are Wall Street Analysts Bullish on Energy Transfer Equity?



Analyst ratings for Energy Transfer Equity

About 72.0% of analysts surveyed by Reuters rated Energy Transfer Equity (ETE) as a “buy” on April 20, while the remaining 28.0% rated it as a “hold.” The MLP GP hasn’t seen any rating updates since the start of this year.

ETE saw a price target cut from Mizuho last week, which lowered the GP’s target price to $20.00 from $21.00. Before this, Wells Fargo and Morgan Stanley had reduced ETE’s target price. 

The recent target price cuts could be due to the FERC’s revised income tax ruling and the possibility of a flat distribution at Energy Transfer Partners due to its high yield. ETP had announced a flat distribution in 4Q17 to fund a portion of equity capital amid its high cost of equity capital.

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Peers’ ratings

Among ETE’s peers, Western Gas Equity Partners (WGP) and NuStar GP Holdings (NSH) have “hold” ratings from 56.3% and 87.5% of analysts, respectively, while 72.7% of analysts rate Plains GP Holdings (PAGP) as a “buy.” Plus, 75.0% of the analysts rate Energy Transfer Partners (ETP) as a “buy.” 

ETE trades below the low range ($17.00) of the analysts’ target price. Its average target price of $20.00 implies an ~25.0% upside potential from the current price levels.


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