- Enterprise Products Partners (EPD +1.2%) is upgraded to Outperform from Neutral with a $78 target price, raised from $71, at Credit Suisse, based on strong distribution growth trends.
- A 1.5x distribution coverage at its current distribution growth trajectory and an investment of 3x-4x the capital to sustain that growth trajectory imply EPD has the ability to grow the distribution faster, or imply higher terminal growth rate vs. most MLPs, the firm calculates.
- With the 1.5x coverage, Credit Suisse thinks EPD could grow its distribution at 6% annually for the next seven years with zero capital investment just by squeezing coverage.