logo
  Join        Login             Stock Quote

Northern Tier Energy (NTI) Downgraded To 'Hold' By Deutsche Bank

 November 14, 2012 02:33 PM


(By Balachander) Northern Tier Energy LP (NYSE: NTI) shares were downgraded to "Hold" from "Buy" by Deutsche Bank analyst Paul Sankey.

Variable payout Mid Con refining MLP Northern Tier (NTI) reported clean earnings of $1.42/unit vs DB estimate at $1.43 and consensus of $1.64.

The excellent quarterly profitability implies exceedingly cheap valuation, so that quarterly adjusted EBITDA of $250 million represents annualized EV/EBITDA of 2.2x, while the $1.48/unit distribution for only 2 months since the IPO implies 35 percent annual yield, Sankey said.

"However, we see a seasonal sequential decline in earnings in Q4 followed by typically-weak Q1 and costly turnarounds, and on a normalized mid-cycle distribution basis the stock looks fully valued," the analyst wrote. "We are in a cyclical short term negative stance on refining. Downgrade to HOLD."

[Related -Northern Tier Energy LP (NTI): Get A 15% Yield And Huge Upside From This Energy Stock]

"Adding to our discomfort as short term bears, the dreaded refining MLP drum is being beaten, with the latest theme being that having spun out all their midstream assets, more refiners should follow Northern Tier and more recently Alon's lead and form variable payout refining MLPs," the analyst said.

Sankey has a price target of $25 on the stock.

NTI shares, which have been trading in the 52-week range of $13.00 to $25.80, tumbled 7.92 percent to trade at $22.56 on Wednesday.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageChipotle Mexican Grill, Inc. (CMG) Q2 Earnings Preview: Will Higher Traffic Offset Higher Costs the Key

Chipotle Mexican Grill, Inc. (NYSE:CMG) will host a conference call to discuss second quarter 2014 read on...

article imageNetflix, Inc. (NFLX) Q2 Earnings Preview: The Ruby Month for a Reason

Netflix, Inc. (NASDAQ:NFLX) will post its second-quarter 2014 financial results and business outlook on its read on...

article imageLadenburg Thalmann Financial Services (NYSEMKT:LTS): Heavy, Durable Insider Buying

Ahh, but any worries over price levels didn’t stop multiple insiders at Ladenburg Thalmann Financial read on...

article imageInternational Business Machines Corp. (IBM) Q2 Earnings Preview: Small Beat and Pop

International Business Machines Corp. (NYSE:IBM) will host a conference call Wednesday, Jul. 16, 2014 at read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.