Netflix, Inc. (NASDAQ: NFLX), Lam Research Co. (NASDAQ: LRCX), Apple, Inc (NASDAQ: AAPL), Broadcom Corp (NASDAQ: BRCM) and Campbell Soup Company (NYSE: CPB) had price targets adjusted by analysts.
BMO Capital Markets boosted its price target on Netflix, Inc. (NFLX) to $280.00. They have a “Market Perform” rating on the company.
UBS AG (NYSE:UBS) slashed its price target on Lam Research Co. (LRCX) to $55.00. They have a “Buy” rating on the company.
Citigroup (NYSE:C) raised its price target on Apple, Inc (AAPL) to $450.00. They have a “Buy” rating on the company.
Auriga lowered its price target on Broadcom Corp (NASDAQ: BRCM) from $47.00 to $41.00. They have a "Buy" rating on the company.
JPMorgan Chase & Co. (NYSE:JPM) increased its price target on Campbell Soup Company (CPB) to $35.00.
Showing posts with label UBS. Show all posts
Showing posts with label UBS. Show all posts
Thursday, July 14, 2011
Tuesday, November 23, 2010
Hess (NYSE:HES) Expands Bakken Holdings at Bargain Price
Hess Corp. (NYSE:HES) enlarged its holdings in the Bakken shale, acquiring an additional 167,000 acres at a bargain price of $4,500 an acre.
"HES agreed to acquire 167,000 net acres in the Bakken shale play from privately held TRZ Energy for $1.05 billion in cash, or an attractive price of -$4,500/acre after adjusting for 4.4 MBoed of production. This is well below the $8,500/acre price paid by WMB last week, the $5,000/acre paid for AEZ’s acreage, and other recent deal metrics of $5,500-$6,500/acre. The transaction will be funded by HES’ $2.4 billion cash balance at the end of 3Q, and is expected to close by year-end," said UBS.
UBS reiterated their "Buy" rating on Hess, which was trading at $68.86, losing $0.83, or 1.19 percent at 12:32 PM EST. UBS has a price target of $78 on Hess, increasing it from $76.
"HES agreed to acquire 167,000 net acres in the Bakken shale play from privately held TRZ Energy for $1.05 billion in cash, or an attractive price of -$4,500/acre after adjusting for 4.4 MBoed of production. This is well below the $8,500/acre price paid by WMB last week, the $5,000/acre paid for AEZ’s acreage, and other recent deal metrics of $5,500-$6,500/acre. The transaction will be funded by HES’ $2.4 billion cash balance at the end of 3Q, and is expected to close by year-end," said UBS.
UBS reiterated their "Buy" rating on Hess, which was trading at $68.86, losing $0.83, or 1.19 percent at 12:32 PM EST. UBS has a price target of $78 on Hess, increasing it from $76.
UBS (NYSE:UBS) Reiterates "Neutral" Rating on Willbros (NYSE:WG)
UBS (NYSE:UBS) sees challenges ahead for Willbros Group (NYSE:WG), as there are little catalysts to boost the company in the short term. Consequently they maintain their "Neutral" rating on them at this time.
UBS said, "WG reduced 2010 rev guidance to $1.1-$1.2b, from $1.2-$1.3b, due to weak T&D. EPS guidance was raised to $0.25-$0.30, but includes the earnout contingency reversal benefit we calculate at $0.96. Overall, the FEP execution was even better than we expected, but the weak T&D segment was disappointing. The Downstream segment is slowly regaining profitability, but the market is still challenging."
Willbros closed Monday at $6.99, dropping $0.10, or 1.41 percent. UBS lowered their price target on them from $9 to $7.75.
UBS said, "WG reduced 2010 rev guidance to $1.1-$1.2b, from $1.2-$1.3b, due to weak T&D. EPS guidance was raised to $0.25-$0.30, but includes the earnout contingency reversal benefit we calculate at $0.96. Overall, the FEP execution was even better than we expected, but the weak T&D segment was disappointing. The Downstream segment is slowly regaining profitability, but the market is still challenging."
Willbros closed Monday at $6.99, dropping $0.10, or 1.41 percent. UBS lowered their price target on them from $9 to $7.75.
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.
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.
Monday, November 1, 2010
LINN Energy's (Nasdaq:LINE) Hedge Strategy a Winner Says UBS (NYSE:UBS)
Citing their hedging strategy, UBS (NYSE:UBS) raised their price target on LINN Energy (Nasdaq:LINE) while maintaining their "Buy" rating on them.
"Signaling confidence in LINE’s operations and balance sheet strength as well as its ability to capitalize on growth initiatives, mgmt lifted the 3Q distribution -5%, to $0.66, its first increase since 1Q08. In addition, mgmt added to hedge positions and now estimates that -100% of planned natgas production is hedged through 2015, while planned oil production is hedged -100% through 2013 and 70% in 2014-15. We applaud the move to secure price protection and note oil hedges were added well above our forecasts. We also highlight LINE’s extensive use of put contracts," UBS said.
LINN closed Friday at $34.99, gaining $0.56, or 1.63 percent. They raised their price target from $36 to $38.
Concerning EPU for 2010, they cut that from $1.53 to $1.47.
"Signaling confidence in LINE’s operations and balance sheet strength as well as its ability to capitalize on growth initiatives, mgmt lifted the 3Q distribution -5%, to $0.66, its first increase since 1Q08. In addition, mgmt added to hedge positions and now estimates that -100% of planned natgas production is hedged through 2015, while planned oil production is hedged -100% through 2013 and 70% in 2014-15. We applaud the move to secure price protection and note oil hedges were added well above our forecasts. We also highlight LINE’s extensive use of put contracts," UBS said.
LINN closed Friday at $34.99, gaining $0.56, or 1.63 percent. They raised their price target from $36 to $38.
Concerning EPU for 2010, they cut that from $1.53 to $1.47.
Southwestern Energy (NYSE:SWN) Capex Expected to Plunge
Citing low natural gas prices and dropping three rigs, UBS (NYSE:UBS) has slashed their price target on Southwestern Energy (NYSE:SWN).
"We believe the combo of SWN dropping 3 rigs and low gas prices is a signal it will reduce 2011 capex vs 2010. Thus, we lowered our ‘10 capex by - $100 MM to $2.0 bn, and 2011-12 capex by - $400 MM/year to $1.9 bn & $2.3 bn, respectively. As a result, we reduced our production growth forecast to 23% and 25% in 2011-‘12, (vs. - 30% per annum previously) and lowered our 2011-2012 EPS/CFPS to $2.15/$5.50 and $3.10/$7.45 from $2.20/
$5.70 and $3.25/$7.95, respectively," said UBS.
Southwestern closed on Friday at $33.84, gaining $0.20, or 0.59 percent. UBS lowered their price target on them from $56 to $45.
"We believe the combo of SWN dropping 3 rigs and low gas prices is a signal it will reduce 2011 capex vs 2010. Thus, we lowered our ‘10 capex by - $100 MM to $2.0 bn, and 2011-12 capex by - $400 MM/year to $1.9 bn & $2.3 bn, respectively. As a result, we reduced our production growth forecast to 23% and 25% in 2011-‘12, (vs. - 30% per annum previously) and lowered our 2011-2012 EPS/CFPS to $2.15/$5.50 and $3.10/$7.45 from $2.20/
$5.70 and $3.25/$7.95, respectively," said UBS.
Southwestern closed on Friday at $33.84, gaining $0.20, or 0.59 percent. UBS lowered their price target on them from $56 to $45.
Concerns Rise on ExxonMobil's (NYSE:XOM) Stock Repurchase Strategy
The purpose of the repurchase of shares by ExxonMobil (NYSE:XOM) has UBS (NYSE:UBS) concerned, as it's not to the end they hoped for after the highly dilutive acquisition of natural gas producer XTO.
"XOM repurchased $3 billion in shares in 3Q, and is increasing the pace to $5 billion in 4Q. However, XOM does not seem to intend to accelerate repurchases to retire the shares issued for the dilutive XTO acquisition; rather, the buyback will remain the “flywheel” to regulate excess cash. We are slightly revising ’10/ ‘11 EPS estimates from $5.77/$5.76 to $5.83/$5.96 primarily on the increased pace of the buyback and higher int’l R&M performance," said UBS.
Exxon closed Friday at $66.49, gaining $0.27, or 0.41 percent. UBS raised their price target on the energy giant from $63 to $65.
"XOM repurchased $3 billion in shares in 3Q, and is increasing the pace to $5 billion in 4Q. However, XOM does not seem to intend to accelerate repurchases to retire the shares issued for the dilutive XTO acquisition; rather, the buyback will remain the “flywheel” to regulate excess cash. We are slightly revising ’10/ ‘11 EPS estimates from $5.77/$5.76 to $5.83/$5.96 primarily on the increased pace of the buyback and higher int’l R&M performance," said UBS.
Exxon closed Friday at $66.49, gaining $0.27, or 0.41 percent. UBS raised their price target on the energy giant from $63 to $65.
Friday, October 29, 2010
Nabors Industries (NYSE:NBR) Lowers Internationa Guidance, Higher Taxes Remain Concern
Citing lower international guidance from Nabors Industries (NYSE:NBR), UBS (NYSE:UBS) said they're maintaining their "Neutral" rating on the company.
UBS said, "We are raising our 2011 EPS estimate by 11% to $1.70 from $1.53 reflecting 25% accretion from the Superior deal. However, the increase was partially offset by lower international guidance and higher taxes...We
continue our Neutral rating on Nabors. The company will benefit from its 20% exposure to pressure pumping near-term, as well as the ultimate sale of its E&P businesses. However, we believe there is risk for a flat to declining North American rig count in 2011 and prefer to sit on the sidelines until we begin to see the rig count roll over."
Nabors closed Thursday at $20.30, losing $0.22, or 1.07 percent. UBS increased their price target on the land drilling contractor from $19 to $22.
UBS said, "We are raising our 2011 EPS estimate by 11% to $1.70 from $1.53 reflecting 25% accretion from the Superior deal. However, the increase was partially offset by lower international guidance and higher taxes...We
continue our Neutral rating on Nabors. The company will benefit from its 20% exposure to pressure pumping near-term, as well as the ultimate sale of its E&P businesses. However, we believe there is risk for a flat to declining North American rig count in 2011 and prefer to sit on the sidelines until we begin to see the rig count roll over."
Nabors closed Thursday at $20.30, losing $0.22, or 1.07 percent. UBS increased their price target on the land drilling contractor from $19 to $22.
Thursday, October 28, 2010
Pioneer Natural Resources (NYSE:PXD) Production Looks Flat for Full Year
Pioneer Natural Resources (NYSE:PXD) looks like its production will be flat year over year, and UBS (NYSE:UBS) said they're going to maintain their "Neutral" rating on the company, although they did raise their price target.
"PXD reiterated its 4Q production growth target of 10% YoY (guidance range of 115-120 MBoed, or 8.5-13%) driven by accelerating drilling activity in the Spraberry and Eagle Ford, which implies full year production is flat YoY. 2010 capex budget remains $1.2 billion. We’ve fine tuned our 2010-11 EPS/CFPS estimates to $1.65/$9.05 and $2.75/11.45 from $1.70/$9.30 and $2.55/$11.55," UBS said.
Pioneer plunged to $69.90 Wednesday, losing $2.10, or 2.92 percent, although in after hours trading, they had gained all that back as of this writing.
UBS increased their price target on Pioneer from $70 to $73.
"PXD reiterated its 4Q production growth target of 10% YoY (guidance range of 115-120 MBoed, or 8.5-13%) driven by accelerating drilling activity in the Spraberry and Eagle Ford, which implies full year production is flat YoY. 2010 capex budget remains $1.2 billion. We’ve fine tuned our 2010-11 EPS/CFPS estimates to $1.65/$9.05 and $2.75/11.45 from $1.70/$9.30 and $2.55/$11.55," UBS said.
Pioneer plunged to $69.90 Wednesday, losing $2.10, or 2.92 percent, although in after hours trading, they had gained all that back as of this writing.
UBS increased their price target on Pioneer from $70 to $73.
Monday, October 25, 2010
Petrobras (NYSE:PBR) Upgraded on Falling Share Price
After dropping 13 percent since early October, and 31 percent on the year, Petrobras (NYSE:PBR) has been out of favor with investors, enduring many downgrades as their debt load continues to be formidable with more on the horizon.
Petrobras has recently stated they may have to borrow another $60 billion over the next five years as well.
Believing they've bottomed out, UBS (NYSE:UBS) upgraded the Brazilian oil giant, citing the fall in price. That "warrants an upgrade" said UBS. They were raised from "Sell" to "Neutral."
The upcoming election in Brazil is important as it relates to Petrobras and potential investors. If the preferred candidate of president Luiz Inacio Lula da Silva, Dilma Rousseff, wins, it would be considered bad for the company as far as offering returns to investors, as there is sure to be much more spending by the government's mandate, which would push returns down.
On the other hand, a win by opposition leader Jose Serra, considered more centrist than Rousseff, would be better for the company and shareholders. Unfortunately, it seems the favorite is Rousseff at this time. The election will be held on October 31.
Petrobras is controlled by the Brazilian state, and so who is heading the country has an immediate impact on the oil giant.
Another challenge for them is the recent announcement they are going to fall short of its production goal of 2.1 million barrels of oil a day. Coupled with the large debt load, it doesn't look good for those who could get better returns elsewhere.
Petrobras has recently stated they may have to borrow another $60 billion over the next five years as well.
Believing they've bottomed out, UBS (NYSE:UBS) upgraded the Brazilian oil giant, citing the fall in price. That "warrants an upgrade" said UBS. They were raised from "Sell" to "Neutral."
The upcoming election in Brazil is important as it relates to Petrobras and potential investors. If the preferred candidate of president Luiz Inacio Lula da Silva, Dilma Rousseff, wins, it would be considered bad for the company as far as offering returns to investors, as there is sure to be much more spending by the government's mandate, which would push returns down.
On the other hand, a win by opposition leader Jose Serra, considered more centrist than Rousseff, would be better for the company and shareholders. Unfortunately, it seems the favorite is Rousseff at this time. The election will be held on October 31.
Petrobras is controlled by the Brazilian state, and so who is heading the country has an immediate impact on the oil giant.
Another challenge for them is the recent announcement they are going to fall short of its production goal of 2.1 million barrels of oil a day. Coupled with the large debt load, it doesn't look good for those who could get better returns elsewhere.
Friday, October 22, 2010
Citigroup (NYSE:C) Lands Energy Investment Team of UBS AG (NYSE:UBS)
The energy investment team from UBS AG (NYSE:UBS) has left the company en masse to join Citigroup (NYSE:C), citing concerns over future compensation from the financial institution.
Stephen Trauber, the head of UBS’ energy investment unit, and senior directors Jerry Schretter, Joel Foote II, Sam Pitts and Michael Jamieson are those who left the bank.
UBS AG spokesman Doug Morris commenting on the departure said, “UBS is firmly committed to serving its energy clients and remaining very active in the sector.”
UBS closed at $18.10 Thursday, dropping $0.11, or 0.60 percent.
Stephen Trauber, the head of UBS’ energy investment unit, and senior directors Jerry Schretter, Joel Foote II, Sam Pitts and Michael Jamieson are those who left the bank.
UBS AG spokesman Doug Morris commenting on the departure said, “UBS is firmly committed to serving its energy clients and remaining very active in the sector.”
UBS closed at $18.10 Thursday, dropping $0.11, or 0.60 percent.
Wednesday, October 20, 2010
Wells Fargo (NYSE:WFC) Downgrades Oasis Petroleum (NYSE:OAS) Citing Valuation
With its strong performance since its summer IPO, Oasis Petroleum (NYSE:OAS) is looked upon as fully valued, and Wells Fargo (NYSE:WFC) was the latest to downgrade them, as the dropped them from "Outperform" to "Market Perform."
Wells said, "We are downgrading shares of OAS following substantial absolute and relative strength. With shares up 55% from the IPO, they have handily outperformed the EPX during that timeframe. With Bakken upside potential increasingly understood, execution a requisite, and oil trading toward the higher end of its recent range, we view risk reward as more consistent with a Market Perform rating. We are maintaining our estimates and valuation at this time."
UBS (NYSE:UBS) downgraded them Monday from "Buy" to "Neutral," citing similar reasons.
Oasis closed Tuesday at $20.26, losing $1.40, or 6.46 percent.
Wells has a valuation range of $21.00 to $23.00 on them.
Wells said, "We are downgrading shares of OAS following substantial absolute and relative strength. With shares up 55% from the IPO, they have handily outperformed the EPX during that timeframe. With Bakken upside potential increasingly understood, execution a requisite, and oil trading toward the higher end of its recent range, we view risk reward as more consistent with a Market Perform rating. We are maintaining our estimates and valuation at this time."
UBS (NYSE:UBS) downgraded them Monday from "Buy" to "Neutral," citing similar reasons.
Oasis closed Tuesday at $20.26, losing $1.40, or 6.46 percent.
Wells has a valuation range of $21.00 to $23.00 on them.
Tuesday, October 19, 2010
Oasis Petroleum (NYSE:OAS) Trading Beyond Valuation?
Oasis Petroleum (NYSE:OAS) has soared since its initial public offering in Jue 2009, soaring about 60 percent since that time.
But according to UBS (NYSE:UBS), they believe the company at this time is trading at 2P valuations that are unsustainable in the short term. Consequently UBS downgraded Oasis from "Buy" to "Neutral."
UBS analyst says, "Since its June IPO, shares of OAS have rallied 60% vs. oily peers of 23%. We attribute the rapid appreciation to: 1) solid operational execution across its first set of Bakken wells; 2) increased M&A activity in the Bakken; and 3) broader confidence in Bakken resource potential. While we still view the company favourably in terms of fundamentals, we now believe the market is trading the company beyond 2P valuations and may be attempting to price in a takeout premium that we believe is unlikely to take place," said UBS.
Oasis closed Monday at $21.66, gaining $0.02, or 0.09 percent.
But according to UBS (NYSE:UBS), they believe the company at this time is trading at 2P valuations that are unsustainable in the short term. Consequently UBS downgraded Oasis from "Buy" to "Neutral."
UBS analyst says, "Since its June IPO, shares of OAS have rallied 60% vs. oily peers of 23%. We attribute the rapid appreciation to: 1) solid operational execution across its first set of Bakken wells; 2) increased M&A activity in the Bakken; and 3) broader confidence in Bakken resource potential. While we still view the company favourably in terms of fundamentals, we now believe the market is trading the company beyond 2P valuations and may be attempting to price in a takeout premium that we believe is unlikely to take place," said UBS.
Oasis closed Monday at $21.66, gaining $0.02, or 0.09 percent.
Monday, October 11, 2010
UBS (NYSE:UBS), Canaccord Maintain "Buy" on Concho Resources (NYSE:CXO)
UBS (NYSE:UBS) and Canaccord Genuity both say they're maintaining their "Buy" rating on Concho Resources (NYSE:CXO).
Canaccord said, "We are reiterating our rating with greater conviction based on the closure of the Marbob deal, the announced divestiture plan and the announced Bone Spring acreage update. We continue to be impressed by the company’s management team and its laser focus on high return oily plays in the Permian Basin. With these announcements, we believe the company is well positioned to outperform based on its stronger asset base and increasing investor interest in the Bone Spring trend."
They have a price target of $74 on Concho.
"CXO will pay roughly $1.3bn (vs. $1.65bn prior) for Marbob after $400m in
pref rights were exercised on Yeso, NM shelf assets (which may be
reversed)...Importantly, CXO disclosed that it acquired 150k net acres in the Bone Spring as part of the deal, vs. 100k previously thought, which is
incremental to our NAV by $3/share...We are lowering our 2011/2012 estimates to $9.93/$11.01 from $10.25/$11.80 owing to lower incremental volumes from the acquisition," said UBS.
They lifted Concho's price target from $70 to $76.
Canaccord said, "We are reiterating our rating with greater conviction based on the closure of the Marbob deal, the announced divestiture plan and the announced Bone Spring acreage update. We continue to be impressed by the company’s management team and its laser focus on high return oily plays in the Permian Basin. With these announcements, we believe the company is well positioned to outperform based on its stronger asset base and increasing investor interest in the Bone Spring trend."
They have a price target of $74 on Concho.
"CXO will pay roughly $1.3bn (vs. $1.65bn prior) for Marbob after $400m in
pref rights were exercised on Yeso, NM shelf assets (which may be
reversed)...Importantly, CXO disclosed that it acquired 150k net acres in the Bone Spring as part of the deal, vs. 100k previously thought, which is
incremental to our NAV by $3/share...We are lowering our 2011/2012 estimates to $9.93/$11.01 from $10.25/$11.80 owing to lower incremental volumes from the acquisition," said UBS.
They lifted Concho's price target from $70 to $76.
Monday, September 13, 2010
BP's (NYSE:BP) Vietnam Assets Getting a Bid
Indian Oil Secretary S. Sundareshan revealed on Saturday that state-run "Oil and Natural Gas Corp" will be making a joint bid with Petrovietnam for the Vietnam assets of BP (NYSE:BP).
The bid should come within a few weeks said Sundareshan, after an evaluation of the assets is completed.
"They (ONGC) are making an evaluation of the value of BP's assets, and once that is finalized they will make an offer in conjunction with Petrovietnam," Sundareshan said.
The Indian government will need to approve of the deal because of production-sharing contracts held by Cairn India for exploration blocks for oil and gas.
According to UBS (NYSE:UBS) analysts, the Vietnam assets are valued at about $966 million, which include the Phu My power generation project, interests in the Lan Tay and Lan Do gas fields, and the Nam Con Son pipeline.
The bid should come within a few weeks said Sundareshan, after an evaluation of the assets is completed.
"They (ONGC) are making an evaluation of the value of BP's assets, and once that is finalized they will make an offer in conjunction with Petrovietnam," Sundareshan said.
The Indian government will need to approve of the deal because of production-sharing contracts held by Cairn India for exploration blocks for oil and gas.
According to UBS (NYSE:UBS) analysts, the Vietnam assets are valued at about $966 million, which include the Phu My power generation project, interests in the Lan Tay and Lan Do gas fields, and the Nam Con Son pipeline.
Wells Fargo (NYSE:WFC) Initiates Coverage on Chesapeake Midstream (NYSE:CHKM)
Chesapeake Midstream Partners (NYSE:CHKM) has captured a lot of attention from the financial world recently, with Wells Fargo (NYSE:WFC) being the latest to initiate coverage on them, starting off with a "Market Perform" rating.
"CHKM has 100% fee-based cash flow and visible growth prospects tied to its GP's drilling plans and potential drop-down opportunities. We forecast a five-year distribution compound annual growth rate (CAGR) of 9.3%, assuming average annual (1) acquisitions of $300 million and (2) growth capex of $510 million. However, CHKM's attractive attributes and above-average growth profile appear fairly reflected in the current valuation, in our view. Approximately 80% of CHKM's distribution is tax deferred," said the Wells analyst.
Other companies recently initiating coverage on Chesapeake Midstream are UBS (NYSE:UBS), who started them with a "Buy"; Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC), with a "Neutral"; and Barclays (NYSE:BCS) with an "Overweight."
Chesapeake Midstream Partners is a provider of natural gas gathering and processing services.
"CHKM has 100% fee-based cash flow and visible growth prospects tied to its GP's drilling plans and potential drop-down opportunities. We forecast a five-year distribution compound annual growth rate (CAGR) of 9.3%, assuming average annual (1) acquisitions of $300 million and (2) growth capex of $510 million. However, CHKM's attractive attributes and above-average growth profile appear fairly reflected in the current valuation, in our view. Approximately 80% of CHKM's distribution is tax deferred," said the Wells analyst.
Other companies recently initiating coverage on Chesapeake Midstream are UBS (NYSE:UBS), who started them with a "Buy"; Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC), with a "Neutral"; and Barclays (NYSE:BCS) with an "Overweight."
Chesapeake Midstream Partners is a provider of natural gas gathering and processing services.
Wednesday, September 8, 2010
Citigroup (NYSE:C), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), UBS (NYSE:UBS), Barclays (NYSE:BCS) Initiate Coverage on Chesapeake (NYSE:CHKM)
It has been awhile since I've seen this many companies initiate coverage on a company at one time, but Citigroup (NYSE:C), Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), UBS (NYSE:UBS) and Barclays (NYSE:BCS) have all started covering Chesapeake Midstream Partners, L.P (NYSE:CHKM).
UBS and Citigroup were the most upbeat on Chesapeake, starting them off at a "Buy." UBS wasn't as positive on its price target for the company, setting it at $25.50, while Citigroup is looking for $28.50.
Goldman Sachs and Bank of America, via Merrill Lynch, placed a "Neutral" rating on Chesapeake. Goldman has a price target of $25 on them.
Barclays rates the company at "Overweight," with a price target of $26.
Every financial institution liked the way the revenue for the company is structured, based on contracted fees over a period of 10 years.
That means there is little risk or downside to changing commodity or natural gas prices, as the fees aren't primarily based on price but on the service offered, which is transporting gas from the well head to the pipeline of the company they're doing business with.
Along with Chesapeake Energy (NYSE:CHK), the other major customer of Chesapeake Midstream is Total (NYSE:TOT).
There is a minimum volume agreement in place over a ten-year period, which will increase on an annual basis through 2018.
Chesapeake Midstream is a venture between Global Infrastructure Partners LP and Chesapeake Energy.
UBS and Citigroup were the most upbeat on Chesapeake, starting them off at a "Buy." UBS wasn't as positive on its price target for the company, setting it at $25.50, while Citigroup is looking for $28.50.
Goldman Sachs and Bank of America, via Merrill Lynch, placed a "Neutral" rating on Chesapeake. Goldman has a price target of $25 on them.
Barclays rates the company at "Overweight," with a price target of $26.
Every financial institution liked the way the revenue for the company is structured, based on contracted fees over a period of 10 years.
That means there is little risk or downside to changing commodity or natural gas prices, as the fees aren't primarily based on price but on the service offered, which is transporting gas from the well head to the pipeline of the company they're doing business with.
Along with Chesapeake Energy (NYSE:CHK), the other major customer of Chesapeake Midstream is Total (NYSE:TOT).
There is a minimum volume agreement in place over a ten-year period, which will increase on an annual basis through 2018.
Chesapeake Midstream is a venture between Global Infrastructure Partners LP and Chesapeake Energy.
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