Will Western Gas Partners (WES) Stock Be Affected Today by This Analyst Action?

NEW YORK (TheStreet) -- Shares of Western Gas Partners LP (WES) are down 2.53% to $67.47 despite the company being upgraded to "outperform" from "neutral" at Credit Suisse earlier on Tuesday.

The firm derived a price target of $86 for the Texas-based energy asset company.

"We believe estimates and growth could trend higher providing upside bias to our outlook based on potential growth initiatives in the Delaware Basin and it also announced the acquisition of Nuevo Midstream for $1.5B which we estimate as being accretive by an average of 10% on a DCF/unit based on acquiring 100% of the interests in Nuevo," said analysts at Credit Suisse.

Separately, TheStreet Ratings team rates WESTERN GAS PARTNERS LP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate WESTERN GAS PARTNERS LP (WES) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and compelling growth in net income. 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 6.7%. Since the same quarter one year prior, revenues rose by 19.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.80, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • WESTERN GAS PARTNERS LP has improved earnings per share by 13.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WESTERN GAS PARTNERS LP increased its bottom line by earning $1.81 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($2.29 versus $1.81).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 30.8% when compared to the same quarter one year prior, rising from $78.51 million to $102.68 million.
  • You can view the full analysis from the report here: WES Ratings Report
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