Seeking Alpha

SunCoke Energy +5.7% after BofA upgrade

  • SunCoke Energy (SXC +5.7%) is upgraded to Buy from Neutral with a $25 price target, up from $20, at BofA, which cites several potential catalysts coming through its SunCoke Partners MLP (SXCP +1.4%) into 2014.
  • SXC's Sunoco tax-sharing agreement expires Jan 18, giving the MLP more flexibility to either drop down assets or divest its underperforming coal business; dropping down take-or-pay coke assets to its MLP would provide attractive returns through its 58% stake in the MLP.
  • SXC essentially provides a way for investors to benefit from an attractive yield for those who can't own MLPs, the firm adds.
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