Deutsche Bank Resumes Energy Transfer Equity, L.P. (ETE) at Buy

Deutsche Bank resumed coverage on Energy Transfer Equity, L.P. (NYSE: ETE) with a Buy rating and a price target of $20. Analyst Kristina Kazarian refocused on fundamentals and the ramp of projects coming online following its terminated merger.

"Recall in the last week, we saw two ratings actions – negative outlook at Moody vs. re affirmed stable at S&P. Our opinions are closer to S&P, as we don’t see NT issues funding the backlog given project financing on DAPL/ETCOP (our # $885m net to ETP) + cash ($2.2b SUN drop) + limited ATM use. As we look into CY17, we think capex going forward should trend below $2.1b CY16 guidance (in-line with trend on the last earnings call). Combining lower capex + new project EBITDA  we think ETE / ETP cash flow profiles will improve," said the analyst.

"We continue to think ETP’s Permian and Marcellus assets remain strong and expect a 2H recovery in the Eagle Ford as NGL prices improve. ETP has strong MVCs on most of its newer assets, so its operating leverage (“ethane uplift”) is less apparent, but we still see it as one of the better G+P+F footprints to play the theme," added Kazarian.

For an analyst ratings summary and ratings history on Energy Transfer Equity, L.P. click here. For more ratings news on Energy Transfer Equity, L.P. click here.

Shares of Energy Transfer Equity, L.P. closed at $15.10 yesterday.

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