- Investors in SunCoke Energy (SXC -2.4%) and SunCoke Energy Partners (SXCP -0.2%) have good reason to feel frustrated, Wells Fargo's Sam Dubinsky says, but the recent critical letter from Jet Capital ultimately is a positive for the stock - which the analyst reiterates with an Outperform rating - and the MLP.
- Jet expressed dissatisfaction with the pace of SXC’s dropdowns, its capital allocation strategy, failure to convince Wall Street of the MLP value proposition, lack of third-party acquisitions, and an unclear strategic direction.
- Dubinsky thinks SXC is undervalued based on a sum-of-parts valuation analysis and that shares should be worth $25-$27; SXCP also is too cheap, paying a ~10% yield post dropdowns, and shares should be worth $32-$36.