Story updated at 10 a.m. to reflect market activity.
Access Midstream partners fell -0.5% to $62.67 in morning trading.
The firm reiterated its "buy" rating for the stock. The higher price target reflects higher volume growth and distribution growth according to analysts Jeffrey Birnbaum and Shneur Z. Gershuni.
"We are increasing our standalone ACMP price target on modestly higher volume growth and forecast distribution growth in the out years of our model (2017 and 2018 growth now ~17% growth/yr vs. ~15.5% previously)," the analysts wrote. "Our 2016 growth capex forecast increases from $700MM to $900MM-a figure above guidance of $600-$800MM but one that could continue heading higher as additional opportunities develop and become contracted (guidance only includes projects booked to date)."
Separately, TheStreet Ratings team rates ACCESS MIDSTREAM PARTNERS LP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACCESS MIDSTREAM PARTNERS LP (ACMP) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, increase in net income and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 16.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for ACCESS MIDSTREAM PARTNERS LP is rather high; currently it is at 66.47%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.04% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 236.73% to $269.82 million when compared to the same quarter last year. In addition, ACCESS MIDSTREAM PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of 17.57%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 2.6% when compared to the same quarter one year prior, going from $59.54 million to $61.08 million.
- Compared to its closing price of one year ago, ACMP's share price has jumped by 31.80%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: ACMP Ratings Report