Zacks Investment Research downgraded
OCI Partners LP
) 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
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
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
), Johnson Matthey plc (
) and LyondellBasell Industries NV (
). All these stocks carry a Zacks Rank #2 (Buy).
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