NEW YORK (TheStreet) -- Shares of Energy Transfer Partners (ETP) are trading higher by 0.42% to $57 in Tuesday's after-hours trading after analysts at Deutsche Bank initiated stock coverage with a "buy" rating and a price target of $67.
Their positive outlook was due to several reasons: "Energy Transfer Partners holds the majority of Energy Transfer Equity (ETE)'s operating assets, and near-term, we expect synergies following the recently closed merger with Regency to provide upside."
Lastly, they added that the company holds the GPs and large LP stakes in Sunoco Logistics Partners (SXL) and Sunoco (SUN), offering exposure to their growth.
According to the Wall Street analysts' estimates, distribution growth is expected to continue in the remaining quarters in 2015, Yahoo Finance reported.
Energy Transfer Partners is a natural gas and propane company.
The stock had closed slightly lower, down 1.03% to $56.76.
TheStreet Ratings team rates ENERGY TRANSFER PARTNERS -LP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ENERGY TRANSFER PARTNERS -LP (ETP) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. We feel its 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:
- ENERGY TRANSFER PARTNERS -LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENERGY TRANSFER PARTNERS -LP turned its bottom line around by earning $1.65 versus -$0.24 in the prior year. This year, the market expects an improvement in earnings ($2.22 versus $1.65).
- Despite the weak revenue results, ETP has outperformed against the industry average of 38.3%. Since the same quarter one year prior, revenues fell by 22.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENERGY TRANSFER PARTNERS -LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The gross profit margin for ENERGY TRANSFER PARTNERS -LP is currently extremely low, coming in at 10.55%. Regardless of ETP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.94% trails the industry average.
- In its most recent trading session, ETP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: ETP Ratings Report