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MLP Rating Updates for the Week Ended March 30

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Cheniere Energy Partners

Cheniere Energy Partners (CQP), the MLP midstream subsidiary of Cheniere Energy (LNG), saw an upward revision of its target price last week. Citigroup increased its target price to $39 from $37. About 50% of analysts rate CQP a “hold,” and the remaining 50% rate it a “buy.” CQP’s average target price of $34.90 implies a 21% upside potential from its current price.

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Summit Midstream Partners

Citigroup lowered Summit Midstream Partners’ (SMLP) target price to $18 from $21. About 44.4% of analysts rate SMLP a “buy,” 33.3% rate it a “hold,” and the remaining 22.2% rate it a “sell.” SMLP’s average target price of $20.90 implies a 49% upside potential from its current price.

Enable Midstream Partners

Citigroup upgraded Enable Midstream Partners (ENBL) last week to a “buy” from a “neutral,” which is equivalent to a “hold.” However, it reduced the target price to $15.50 from $16.30. About 45.5% of analysts rate ENBL a “buy,” 36.4% rate it a “hold,” and the remaining 18.2% rate it a “sell.” ENBL’s average target price of $17.20 implies a 25% upside potential from its current price.

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Western Gas Partners

Western Gas Partners (WES) and its GP (general partner) Western Gas Equity Partners (WGP) were upgraded by Citigroup last week. It raised them both to a “buy” from a “neutral.” However, it reduced their target prices as follows.

  • WES: $46 from $55
  • WGP: $40 from $41

About 61.1% of analysts rate WES a “buy,” and the remaining 38.9% rate it a “hold.” About 53.3% rate WGP a “hold,” and the remaining 46.7% rate it a “buy.” WES’s and WGP’s average target prices of $57.90 and $45.70, respectively, imply a 36% and 38% upside potential, respectively, from their current price levels.

Tallgrass Energy Partners

Tallgrass Energy Partners (TEP) saw a rating downgrade and two downward target price revisions following the merger announcement with Tallgrass Energy GP (TEGP). Stifel lowered TEP to a “hold” from a “buy.” The target price revisions include the following:

  • Citigroup: $41 from $51
  • Morgan Stanley: $42 from $48

Half of the analysts rate TEP a “buy,” and the remaining 50% rate it a “hold.” TEP’s average target price of $46.70 implies a 23% upside potential from its current price level.

Dominion Midstream Energy Partners

Dominion Midstream Energy Partners (DM) continues to see rating downgrades and target price cuts following the recent FERC (Federal Energy Regulatory Commission) tax ruling. Last week, Evercore ISI lowered the partnership to “in-line,” which is equivalent to a “hold,” from “outperform,” which is equivalent to a “buy.” The target price revisions include the following:

  • Evercore ISI: reduced to $16
  • Citigroup: $16 from $35
  • RBC Capital Markets: $20 from $24

About 64.3% of analysts rate DM a “hold,” and the remaining 35.7% rate it a “buy.” DM’s average target price of $24.40 implies a 59% upside potential from its current price level.

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