- Atlas Pipeline Partners (APL +0.2%) is initiated with a Hold rating and $35 price target at Deutsche Bank as a “premier midstream MLP" with gathering and processing assets and pipelines in liquids-rich shale plays.
- The firm APL's solid earnings growth bolstered by its diversified well-positioned assets, sizable high-return expansion projects, and accretive acquisitions coupled with a strong hedging program and continued focus on de-risking the operations and financials support a 5%-7% distribution growth over the next few years.
- However, DB is cautious about APL's 60% of EBITDA exposed to commodities, an elevated leverage ratio and 11% cost of capital vs. the 8% sector average.