Investment Conclusion Our $32 price target is based on a 12 month cash distribution run rate of $2.29 and a target yield of 7.25%.
Summary Both EBITDA and distributable cash flow surpassed our F'1Q estimates by a healthy margin despite the warmer than normal temperatures. NRGY remains the most frustrating stock to follow in the MLP sector, in our view. From a fundamental standpoint, NRGY continues to perform well with strong quarterly earnings results, accretive acquisitions and ability to consistently grow the distribution payment. Despite the positive developments, NRGY continues to lag the sector and trade at a steep discount to historical average yield spreads relative to the propane index and comparable growth profile peers. While patience is required, we believe NRGY still provides an attractive risk/reward profile underpinned by a cheap valuation level (healthy yield) and solid growth prospects. There is an attractive and likely call option connected to NRGY making modest-scale acquisitions that could potentially lift it back on investors radar screens and close the steep discount valuation relative to comparable growth profile MLPs.
Nice story-heard it before-down it goes-if the Fed.seems like it`s going to keep raising rates lower price very possible-it may not go below 25 unless the whole market tanks-most of my holdings are in ETF`s which are behaving very nicely-I`m still very cautious about the market-just my view,I could be wrong.
you are so transparent tom, stop trying to spread your fud.
for you folks truly interested in nrgy here is another interesting comment. By the way, listen to the CC. these guys have it together and this Q was a very strong upside surprise.
>>In our view, the most important takeaway from the conference call was management�s optimism on the acquisition front and the Partnership�s outlook. Notably, fundamentals and growth prospects remain solid. Accordingly, we are maintaining our fiscal 2006 and 2007 cash flow estimates.<<