Buckeye Stays Neutral - Analyst Blog
03 10월 2013 - 1:01AM
Zacks
On Sep 30, 2013, we maintained our Neutral recommendation on
Buckeye Partners L.P. (BPL). The Houston-based
independent petroleum products pipeline operator carries a Zacks
Rank #3 (Hold).
Why the Reiteration?
Buckeye Partners delivered year-over-year earnings increase in
the second quarter 2013. The outperformance stemmed from its strong
pipeline and terminal business as well as international
operations.
The reiteration, however, takes into account the partnership’s
exposure to fluctuations in petroleum product and diesel prices. In
addition, a significant portion of Buckeye Partners’ operations are
located in areas affected by severe weather conditions which might
pose serious operational challenges.
Buckeye Partners will derive substantial benefits from its
multiple ventures that have already attracted several long-term
customers. The partnership’s ongoing Perth Amboy Terminal project
scored a contract with a New York gasoline blender for storage
services having a capacity of 1 million barrels. Also, its Chicago
propylene storage facility booked two back-to-back crude oil
service contracts.
The implementation of positive tariff rate changes effective Jul
1, 2013, will drive the partnership’s top-line. In addition, a
healthy liquidity position will help fund Buckeye Partners’ future
investments. The partnership’s quarterly distribution rate increase
of 52.6% to $1.0625 per unit will undoubtedly retain investors’
attention to the stock.
Nevertheless, Buckeye Partners’ operations are subject to
stringent environmental laws which expose it to increasing
operation and compliance costs.
Other Stocks to Consider
Pipeline industry players looking good at the moment are Zacks
Ranked #2 (Buy) Magellan Midstream Partners L.P.
(MMP), Pioneer Southwest Energy Partners L.P.
(PSE) and Sunoco Logistics Partners L.P.
(SXL).
BUCKEYE PARTNRS (BPL): Free Stock Analysis Report
MAGELLAN MDSTRM (MMP): Free Stock Analysis Report
PIONEER SW EGY (PSE): Free Stock Analysis Report
SUNOCO LOGISTIC (SXL): Free Stock Analysis Report
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Zacks Investment Research
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