In a research note published this morning, Wells Fargo analyst Praneeth Satish maintained a Neutral rating on Linn Energy (NASDAQ:LINE), following the release of the company’s third-quarter results, which were slightly below the analyst forecast, but inline with consensus. No price target was assigned.
Satish wrote, “We are lowering our 2014 and 2015 DCF per unit estimates to $3.07 and $2.83, respectively, from $3.26 and $3.36. Additionally, we are lowering our valuation range by $4-5 to $24-27 per unit to reflect a lower distribution growth outlook and LINE’s elevated financial risk profile.”
The analyst added, “We do not forecast a distribution reduction in the near-term (2015E) given LINE’s robust hedging portfolio. However, if oil prices remain at current levels over the next few years, we believe LINE’s coverage ratio could decrease to levels that are borderline for a possible distribution reduction. That being said, we believe crude oil and NGL prices should recover over time to levels that would effectively eliminate distribution security concerns for LINE.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Praneeth Satish has a total average return of -5.1% and a 20% success rate. Satish is ranked #2650 out of 3429 analysts.