OCI Partners LP Downgraded to Strong Sell on Reduced Outlook - Analyst Blog

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Zacks Investment Research downgraded OCI Partners LP ( OCIP ) to a Zacks Rank #5 (Strong Sell) on Aug 23, 2014. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of underperforming in comparison with the broader market.

Why the Downgrade?

OCI Partners LP's lower-than-expected results for second-quarter 2014 and weak outlook for 2014 have triggered downward estimates revisions since Aug 12. Earnings came in at 51 cents per limited partner unit, lagging the Zacks Consensus Estimate of 64 cents by 20.3%. Currently, the company has an average earnings surprise of -22.7%.

Top-line improvement of 6.1% year over year was partially offset by a 15.3% increase in cost of sales. Depreciation expenses rose 2.3%; while a hike of 6.5% was recorded in interest expenses, indicating high debt levels. Exiting the quarter, net debt stood at $283.3 million, up 36.3% year over year.


For 2014, OCI Partners LP has revised its price assumptions for methanol and ammonia, apart from projecting lower sales volume for methanol. Cash distributions forecast has been lowered to a range of $1.40−$1.60 from the prior expectation of $2.00.

Over the last 30 days, the Zacks Consensus Estimate for OCI Partners LP has decreased by 12.8% to $1.43 per unit for 2014 and by 8.3% to $2.00 per unit for 2015. Also, OCI Partners LP has an Earnings ESP of -2.10% for 2014.

Other Stocks to Consider

Currently, OCI Partners LP has a market capitalization of $1.6 billion. Some better-ranked stocks in the industry include Celanese Corporation ( CE ), Johnson Matthey plc ( JMPLY ) and LyondellBasell Industries NV ( LYB ). All these stocks carry a Zacks Rank #2 (Buy).


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OCI PARTNERS LP (OCIP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Stocks

Referenced Stocks: CE , CDTI , LYB , JMPLY , OCIP

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