Thursday, November 4, 2010

Magellan Midstream (NYSE:MMP) Gasoline and Diesel Volumes Increasing

Magellan Midstream (NYSE:MMP) performed close in line to estimates, and UBS (NYSE:UBS) maintains their "Buy" on them, saying gasoline and diesel volumes exceeded expectations.

UBS said, "Excluding non-cash items, MMP achieved 3Q10 EPU of $0.58 versus UBS’ and consensus’ $0.61/$0.55 estimates, respectively. Despite integrity testing in the ammonia pipeline costing $7.6mm (-$0.07/unit), improving gasoline and diesel volumes combined with the BP acquisition performing ahead of expectations drove distributable cash flow of $86mm, roughly inline with UBS’ $87mm estimate."

Product demand should continue to grow in going forward.

Magellan Midstream closed Wednesday at $54.39, dropping $0.19, or 0.34 percent. UBS has a price target of $61 on them, raising it from $59.

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