Credit Suisse says: "Longhorn Looking Better; Mgt Raises
Guidance; UPGRADING to OUTPERFORM (from Neutral); Raising Ests
& TP to $59 (from $55)"
Raise to Outperform; TP to $59: "We are raising our TP by $4, to
$59, and maintaining our target yield range of 3.75%-4.0% with
price range of $57-$61. We have raised our distribution growth
forecast and consequently believe that investors likely bid down
the yield further. We believe that MMP has NTM total return
potential of 14%-21%, which justifies an Outperform rating from
Longhorn Looking Even Better: "MMP announced that it has
allocated 10% of the capacity on Longhorn for spot market shipments
which has been oversubscribed. MMP is also considering adding an
add'l 50 kbpd capacity which would only cost $80mm and we estimate
would add $30mm EBITDA. We are raising our FY2014 EBITDA forecast
by $31mm to reflect this "potential" project as well as the
recently announced $190mm P/L acquisition from PAA."
Raising Distribution Growth Outlook: "We are raising our 3-year
distribution growth outlook from 11% to 12%, as we believe that the
accretion from the Longhorn expansion could facilitate accelerated
growth as MMP already had solid coverage ratios."
MMP Raised FY2013 DCF Guidance: "MMP raised its guidance for
FY2013 DCF by $10mm to $580mm. We had thought MMP's previous
guidance was low and we are raising our forecast by $8mm to $592mm
to account for accretion from the recent $190mm refined pipeline
acquisition from Plains. We are raising our FY2013 EBITDA forecast
by $10mm, to $790mm. We are raising our 2013/2014/2015 EPU
estimates to $2.33/$2.64/$2.96 from $2.21/$2.50/$2.80
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