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Kinder Morgan Energy Partners Message Board

  • ladystaed ladystaed Apr 16, 1998 12:35 PM Flag

    coverage initiated

    NEW YORK, April 16 (Reuters) - Lehman Brothers said on
    Thursday it started coverage on shares of Kinder Morgan Energy
    Partners LP with a buy rating and a 12-month $48 per share
    target price.
    -- Analyst Richard Gross said company's cash flow growth
    for 1998 and 1999 is highly visible, given the series of
    acquisitions it made in 1997 and facility expansions recently
    completed or currently underway.
    -- Unit appreciation is driven by increases in cash
    distribution, Gross said.
    -- Stock up 1/16 to 36-9/16.

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    • The Lehman Brothers news release is questionable. Any more expansion done with stock purchases will require further dilution of existing equity. The only way for ENP shares to go up to $48 per share (due to facility expansions increasing earnings) is for the P/E to jump up even more. The P/E is already too high for this company.

      Beware of stock promotion by fee-driven investment bankers. Could be a signal that the stock is headed down...