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EPD, MPLX, ETP, and PAA: Analysts’ Recommendations

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Analysts’ recommendations

Of the four MLPs that we’re discussing in this series, Enterprise Products Partners (EPD) received the most “buy” recommendations from the analysts surveyed by Reuters. All of the analysts surveyed by Reuters rated Enterprise Products Partners as a “buy.” In comparison, 94% of the analysts covering MPLX (MPLX) rated it as a “buy.” Nearly 76% of the analysts covering Energy Transfer Partners (ETP) rated it as a “buy.”

In comparison, 44% of the surveyed analysts rated Plains All American Pipeline (PAA) as a “buy,” 52% rated it as a “hold,” and 4% rated it as a “sell.”

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Upside potential

Of the four MLPs, Energy Transfer Partners has the maximum upside potential based on its median target price. Energy Transfer Partners’ median target price is $24. Currently, Energy Transfer Partners is trading at $19.06. The median target price implies an upside potential of 26% from the current price.

The median target prices for MPLX, Plains All American Pipeline, and Enterprise Products Partners are $42, $27, and $31, respectively. These target prices imply an upside potential of 24%, 16%, and 13%, respectively, from the current prices.

Conclusion

The highest “buy” ratings for Enterprise Products Partners likely reflect its attractive valuation, yield, strong financial metrics, conservative leverage, and growth prospects.

Plains All American’s comparatively lower “buy” recommendations might indicate its relatively fair valuation and comparatively lower yield.

MPLX looks attractive based on the parameters we discussed in this series. Energy Transfer Partners’ higher yield reflects investors’ higher risk perception, which offers attractive upside potential.

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