Regency Energy Partners LP Downgraded to “Underweight” at Morgan Stanley (RGP)
Regency Energy Partners LP (NYSE:RGP) was downgraded by equities researchers at Morgan Stanley from an “equal weight” rating to an “underweight” rating in a research report issued on Wednesday, AnalystRatings.NET reports. They currently have a $28.00 price objective on the stock, down from their previous price objective of $29.00. Morgan Stanley’s price target indicates a potential upside of 8.57% from the company’s current price.
The analysts wrote, “Maintaining distribution growth in-line with the broader MLP group could prove difficult for RGP through 2014. Despite asset positioning in several promising plays (Permian, Eagle Ford, Haynesville, Granite Wash, Marcellus), expensive recent acquisitions (SUGS, PVR) will likely necessitate significant further organic investment to generate attractive all-in returns and fully realize opportunities around these footprints. RGP has taken great strides to reconfigure itself as a stable and broadly diversified MLP and benefits from a general partner committed to a proactive approach to sourcing growth (i.e., new acquisitions / projects). However, we are concerned with RGP’s ability to accelerate distribution growth (over the next 4-5 quarters) given the modest dilution in 2014 from the PVR purchase. We are modestly lowering our price target to $28 (from $29) – 14% one-year total return potential – to account for execution risk around the recent PVR transaction. With MSe overall median MLP distribution growth of 10.9% in 2014e and 9.3% in 2015e (compared to 4.3% and 4.1% at RGP), we believe the current discounted valuation (7.1% yield/12.8x 2014e P/DCF relative to MS medians of 5.7%/15.4x) is warranted and performance could become challenging.”
Several other analysts have also recently commented on the stock. Analysts at Barclays cut their price target on shares of Regency Energy Partners LP from $30.00 to $29.00 in a research note to investors on Friday, October 11th. They now have an “equal weight” rating on the stock. Separately, analysts at Cowen and Company downgraded shares of Regency Energy Partners LP from an “outperform” rating to a “market perform” rating in a research note to investors on Thursday, September 12th. They now have a $51.00 price target on the stock, down previously from $58.00. Finally, analysts at UBS AG cut their EPS estimates on shares of Regency Energy Partners LP in a research note on Monday. They now have a $28.00 price target on the stock. One analyst has rated the stock with a sell rating and eight have given a hold rating to the company’s stock. The company has an average rating of “Hold” and a consensus target price of $30.13.
Shares of Regency Energy Partners LP (NYSE:RGP) traded down 1.71% during mid-day trading on Wednesday, hitting $25.79. The stock had a trading volume of 803,900 shares. Regency Energy Partners LP has a one year low of $20.58 and a one year high of $29.35. The stock’s 50-day moving average is $27.55 and its 200-day moving average is $26.33. The company’s market cap is $5.413 billion.
Regency Energy Partners LP (NYSE:RGP) last issued its quarterly earnings data on Wednesday, August 7th. The company reported $0.07 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.06 by $0.01. The company had revenue of $639.00 million for the quarter, compared to the consensus estimate of $423.75 million. Regency Energy Partners LP’s revenue was up 25.0% compared to the same quarter last year. On average, analysts predict that Regency Energy Partners LP will post $0.24 earnings per share for the current fiscal year.
Regency Energy Partners LP (NYSE:RGP) is engaged in the gathering and processing, contract compression, treating and transportation of natural gas and the transportation, fractionation and storage of natural gas liquids (NGLs).
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