NEW YORK (TheStreet) -- Eagle Rock Energy (EROC) was falling -17.3% to $4.01 Thursday after announcing the suspension of its distribution before the closing of the sale of its midstream business to Regency Energy Partners (RGP).
The company said the reason for the distribution suspension is to preserve liquidity ahead of the sale due to a potential deal. The FTC recently requested additional information about the midstream sale, causing the delay.
Bank of America-Merrill Lynch cut its price target for Eagle Rock Energy to $5.50 from $6.50, saying the distribution suspension "is a negative and another blow to weary EROC investors that already endured a previous cash distribution cut and unit price underperformace."
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TheStreet Ratings team rates EAGLE ROCK ENERGY PARTNRS LP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate EAGLE ROCK ENERGY PARTNRS LP (EROC) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."