Michael Fitzsimmons • 14 Comments
Michael Fitzsimmons • 10 Comments
Mon, Jun. 20, 3:48 PM
- Barclays downgrades some MLP names on valuation, cutting Enable Midstream Partners (ENBL -2.1%) and TC Pipelines (TCP +1.6%) to Underweight from Equal Weight and lowering PennTex Midstream Partners (PTXP +0.5%) and EnLink Midstream (ENLC -3.2%) to Equal Weight from Overweight.
- The firm notes that ENBL has gained 56% YTD and is cautious about re-contracting risk on certain assets that could be a headwind to the company’s growth, and worries that TCP's prospects for dropdowns have become less certain given parent TransCanada’s pending acquisition of Columbia Pipeline.
- Barclays believes PTXP has a favorable organic growth opportunity given the location of its assets where drilling economics are positive and producers have transportation advantages, but that the positive aspects are fully priced in.
- The firm also notes ENLC's 350 bps premium to its LP, EnLink Midstream Partners (ENLK -1.5%), and is not forecasting distribution growth in 2016-17.
Fri, Mar. 18, 3:55 PM
- Columbia Pipeline Group (CPGX +5.9%) has surged today following TransCanada's (TRP -1.2%) $25.50/share takeover offer - no surprise there - but Columbia Pipeline Partners (CPPL -18.5%), CPGX's MLP, is trading nearly 20% lower.
- TRP said little about its plans for the MLP except that it would become the new general partner and own 46% of the units; TRP already has its own MLP - TC Pipeline (TCP -2.2%) - so its course for the Columbia partnership lacks clarity.
- Investors may be worried that TRP will buy up the MLP cheaply, leaving them on the hook for capital gains taxes that would cut into their returns, Hennessy Gas Utility Fund manager Skip Aylesworth tells Bloomberg.
- Barclays downgrades CPPL to Equal Weight from Overweight with a $15 price target, forecasting slower growth in the MLP’s investor payout under TRP’s control.
Dec. 21, 2015, 11:46 AM
- EnLink Midstream (ENLC -7.4%) is downgraded to Neutral from Buy with an $18 price target, reduced from $28, at BofA/Merrill, which forecasts flat distributions through 2017 at ENLC and EnLink Midstream Partners (ENLK +2.4%), believing management will be prudent in building coverage instead of prioritizing distribution growth.
- The firm notes the $1.5B acquisition of Tall Oak Midstream is expected to generate $80M in EBITDA 2016 and expanding to $300M by 2018, as EnLink deploys $650M in capex over three years.
- Meanwhile, BofA upgrades TC Pipelines (TCP +2.8) to Buy from Underperform with a $50 price target, citing a fee-based cash flow profile, which “should bode well in a persistent MLP environment of high volatility, capital market concerns, and focus on leverage.”
Dec. 4, 2014, 3:25 PM
- Enbridge (ENB +10.8%) soars to all-time highs on heavy volume following news of its sweeping plan to raise its dividend by 33% and transfer ownership of its Canadian pipelines to affiliates in a bid to lower funding costs for future expansion and new projects.
- The dropdown allows ENB “to accelerate dividend growth immediately and for the next four-plus years,” ScotiaBank analyst Matthew Akman says.
- "It's another attempt to remove the conglomerate discount by streamlining its businesses," says Colin Cieszynski of CMC Markets.
- The move comes as rival TransCanada (TRP +1.6%) faces pressure from activist investors to overhaul its business, including accelerating dropdowns into its U.S.-based affiliate TC Pipelines (TCP +0.6%) and a spinoff of its power business.
- EEP +6.6%, EEQ +7.3%.
Sep. 19, 2014, 10:29 AM
- TransCanada (TRP +4.8%) is sharply higher in early trading as speculation abounds that U.S. activist hedge funds - perhaps including Dan Loeb's Third Point, which has amassed a position in recent months - are reviewing the company for a possible breakup.
- Responding to recent trading activity, TRP defends its corporate structure as the best way to maximize profit and dividend payouts to shareholders
- TRP also remains committed to plans to sell the rest of its U.S. natural gas pipeline assets to its TC PipeLines (TCP +4%) MLP over the coming years; it expects the assets to generate nearly $500M EBITDA in 2016 and beyond.
Feb. 11, 2014, 3:12 PM
- Boardwalk Pipeline Partners (BWP +7.1%) lost nearly half its value yesterday after slashing its payout by more than 80%, but some analysts see a buying opportunity amid the carnage.
- Citigroup upgrades shares to Buy from Neutral, urging value investors to note the severity of yesterday’s move relative to where other midstream MLPs trade on a cash flow multiple basis; the firm figures BWP trades at 10.3x 2015 EBITDA and 9.4x 2016 EBITDA, more favorable than other midstream MLPs with similar challenges such as TC Pipelines (TCP) and Niska Gas Storage Partners (NKA).
- Given the weaker outlook, Morgan Stanley says BWP/Loews (L) made the wisest choice to substantially reduce the distribution rate while remaining able to fund the capital plan internally, preserving maximum value.
- Deutsche Bank is staying away, however, maintaining its Sell rating with a $12 price target (from $20), expecting a longer, slower restoration of distribution.
Aug. 23, 2013, 12:25 PM
- TC Pipelines (TCP -2%) is downgraded to Underperform from Buy with a $51 price target (from $53) at BofA Merrill Lynch, which says the rating change brings TCP more in line with other dry natural gas exposed MLPs such as SEP, BWP and EPB.
- The firm cites valuation after solid recent gains, minimal organic growth over the medium-term, some remaining re-contracting risk, expected low single-digit cash distribution growth, and the continued sporadic timing of potential dropdowns from general partner TransCanada (TRP).
May 17, 2013, 3:58 PM
TC Pipelines (TCP +2.6%) is upgraded to Buy from Neutral with a $51 price target at BAML on plans to acquire additional equity interests in Gas Transmission Northwest and Bison. The firm views TCP's recently announced drop-down as alleviating most concerns about uncertainty around the ability to re-contract pipeline capacity on attractive terms and below peer-average distribution growth.| May 17, 2013, 3:58 PM | 1 Comment
May 16, 2013, 8:28 AMTransCanada (TRP) plans to sell down its stake in two natural gas pipelines to affiliated company TC PipeLines (TCP) in a ~$1B deal including debt, which it says will free up funds for capital investments. TCP -2.8% premarket after saying it would sell 7.7M units in an effort to raise funds for the acquisition. | May 16, 2013, 8:28 AM
Apr. 28, 2011, 9:00 AM
Premarket gainers: VTAL +32%. LOOP +26%. LFT +21%. CYTR +18%. AET +9%. MEA +9%. FBC +8%. CEG +7%. DB +4%. SSN +4%. NOG +4%. S +3%. BJ +3%. RCL +3%. HPP +3%.| Apr. 28, 2011, 9:00 AM
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