Cypress Energy Partners (CELP +6.2%) shoots higher after Stifel upgrades units to Buy from Hold with a $10.50 price target, citing Chairman/CEO Peter Boylan's upbeat outlook during the firm's meetings with top management.
Stifel says while the outlook for CELP's end markets remains muted, Boylan is positive on future prospects and the company's ability to maintain the distribution at current levels.
A strong cash position combined with its positive distributable cash flow generation gives CELP three and a half years of distribution coverage, representing an 18.5% distribution yield, the firm says.
The Baird group does not necessarily recommend investors buy all the MLPs on the list, but "ample market evidence exists a) to justify a cut, and b) to believe it will drive short run returns, though not without material implications to investors’ cash flow."
Cypress Energy Partners (CELP -0.3%) is downgraded to Neutral from Outperform with a $6 price target, cut from $13, at Baird, which expects the company's 2016 results to reflect material headwinds due to lower oil prices, lower disposal margins and reduced pipeline construction activity.
The firm cuts its 2016 EBITDA and distributable cash flow estimates by a respective 26% and 31%, and sees Q4 2015 results down Q/Q, partly because Q3 results were inflated from a $1M contract settlement.
Baird expects DCF/unit of $0.31 for Q4, which would equate to coverage of 0.76x; ample liquidity likely offsets immediate threats to distribution viability, though long-term this environment likely would not support a continuation.