The firm set a price target of $92 for the Tulsa, OK-based petroleum transportation, storage, and distribution company.
Credit Suisse said it lowered Magellan Midstream Partners' rating because of a valuation call based on re-assessment of master limited partnership's post-earnings.
"No change to forecasts. MMP units have had a great run (delivering roughly 35% to tal return YTD vs. 14% for the AMZX) and now offer a total return potential of ~ 14 % compared to our coverage average of ~ 26%," said analysts at Credit Suisse.
Separately, TheStreet Ratings team rates MAGELLAN MIDSTREAM PRTNRS LP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate MAGELLAN MIDSTREAM PRTNRS LP (MMP) 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, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
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 17.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 58.18% and other important driving factors, this stock has surged by 38.04% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MMP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- MAGELLAN MIDSTREAM PRTNRS LP reported significant earnings per share improvement 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, MAGELLAN MIDSTREAM PRTNRS LP increased its bottom line by earning $2.56 versus $1.93 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $2.56).
- 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 58.1% when compared to the same quarter one year prior, rising from $125.62 million to $198.62 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MAGELLAN MIDSTREAM PRTNRS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: MMP Ratings Report