The analyst firm lowered its price target for the company to $9 from $20. Wunderlich analyst Abhishek Sinha cited risks to BreitBurn's distributions and falling oil prices as reasons for the lower price target and downgrade.
Shares of BreitBurn are "fairly valued as the market is already factoring in a possibility of a distribution cut," according to the analyst.
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Sinha wrote that "although the company has strong hedges...it would still have coverage well below 1.0x in this oil price environment. BBEP has $300mm of liquidity available, which could help cover distributions shortfall; however, the company is already levered high with debt/ntm EBITDA of 4.3x vs the peer average of 3.5x."
TheStreet Ratings team rates BREITBURN ENERGY PARTNERS LP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate BREITBURN ENERGY PARTNERS LP (BBEP) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself."