MLV Moves To The Sidelines On Breitburn Energy Partners Amid Valuation And Liquidity Concerns
In a research report published today, MLV analyst Adam Fackler downgraded shares of Breitburn Energy Partners (NASDAQ:BBEP) from Buy to Hold rating, while no price target was provided.
Fackler wrote, “We are reducing our rating on BBEP to Hold as we believe units are being fully valued by the market following its recent distribution reduction and expect liquidity concerns to create additional headwinds to unit price performance leading up the partnership’s borrowing base redetermination in April.”
The analyst added, “While we continue to regard BBEP’s management team as top tier and believe the partnership will ultimately benefit from its acquisition of QRE, we currently see lower-risk opportunities from other upstream MLPs offering comparable (or superior) return profiles. Factors that could cause us to reassess our rating include (1) an improved commodity-price environment, (2) the resolution of liquidity concerns with a low-cost-of-capital solution, (3) accretive M&A activity, and (4) cost reductions.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Adam Fackler has a total average return of -33.2% and a 25.0% success rate. Fackler is ranked #3265 out of 3429 analysts.