Seaport Global Securities Starts Tesoro Logistics (TLLP) at Accumulate

Seaport Global Securities initiates coverage on Tesoro Logistics (NYSE: TLLP) with a Accumulate rating and a price target of $66.00.

Analyst Sunil Sibal commented, "We are initiating coverage of Tesoro Logistics LP (TLLP) with an Accumulate rating and $66 price target. With more than 50% of revenues tied to the refining operations of TSO, we view TLLP's midstream cash flows as primarily driven by refining demand-pull. Increasing hydrocarbon consumption in PADD V, where the supply of gasoline, jet fuel and distillates was up 3.3% YoY in Q3:15, provides a favorable backdrop for TLLP, in our view. This is further complemented by little direct exposure to commodity prices, while ~70% revenues are covered through MVCs or acreage dedications. We believe volume growth from crude gathering assets in the Bakken (TLLP is adding pipelines in Dunn County) and gas volumes in the Rockies (QEP’s deep-drilling program in Pinedale and increase in well productivity), together with potential accretion from dropdowns by the parent, TSO, provide upside potential for TLLP."

For an analyst ratings summary and ratings history on Tesoro Logistics click here. For more ratings news on Tesoro Logistics click here.

Shares of Tesoro Logistics closed at $54.32 yesterday.

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