Magellan Midstream upped at J.P. Morgan as poised to benefit from inflation

May 25, 2022 3:52 PM ETMagellan Midstream Partners, L.P. (MMP)By: Carl Surran, SA News Editor7 Comments

Oil pipeline in industrial district with factories at dusk

spooh/E+ via Getty Images

Magellan Midstream Partners (NYSE:MMP) +2.3% in Wednesday's trading as J.P. Morgan upgrades shares to Overweight from Neutral with a $57 price target, raised from $52, saying the partnership is well positioned to benefit from higher inflation.

Already poised for a 6% tariff increase on July 1, JPM analyst Jeremy Tonet thinks Magellan Midstream (MMP) could see an even higher increase next year.

Magellan (MMP) owns "best-in-class operational management, effectively limiting cost structure increases and enabling significant revenue growth to fall to the bottom line," according to Tonet, adding that the $435M independent terminal sale closing in the near term represents a key catalyst, underpinning higher buybacks.

On the butane blending side, in addition to wider butane-gasoline spreads potentially benefiting 2023, the Biden administration might suspend summer blending restrictions, which Tonet says would represent a "notable positive" for Magellan (MMP).

Magellan Midstream Partners (MMP) is "a solid dividend growth investment," Khen Elazar writes in an analysis posted recently on Seeking Alpha.

Recommended For You

Comments (7)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.