Friday, October 22, 2010

Citigroup (NYSE:C) Sees AmeriGas (NYSE:APU) Tops for Distribution Growth in Sector

Citigroup Inc. (NYSE:C) said they believe AmeriGas Partners, LP (NYSE:APU) should be the leader in distribution growth in the sector going forward. They maintain a "Hold" rating on the propane company.

Citigroup's John K. Tysseland said, "We are maintaining our Hold...rating for APU based on valuation, but believe the partnership is likely to have the best distribution growth in the sector and continues to be an active consolidator. We would consider buying APU, all things being equal, on a significant pullback in the unit price. We are increasing our target price to $49 from $40."

Concerning earnings projections for 2010-2011, AmeriGas said in a press release, "The Partnership expects to report net income attributable to AmeriGas Partners of approximately $165 million for its fiscal year ended September 30, 2010. Adjusted earnings before interest expense, income taxes, depreciation and amortization excluding the impacts of a previously reported $12.2 million loss related to the termination of interest rate protection agreements and an additional $7.0 million litigation reserve recorded during the fiscal year 2010 fourth quarter (Adjusted EBITDA), are expected to be approximately $340 million for fiscal 2010."

AmeriGas closed Thursday at $46.56, gaining $0.02, or 0.04 percent.

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