Strong Buy on Atlas Energy

Zacks

On Jul 2, Zacks Investment Research upgraded Atlas Energy, L.P. (ATLS) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

This natural gas utility delivered positive earnings surprises in three out of the last four quarters with an average beat of 1.6%. The long-term sales growth of the company is presently pegged at 9.69%.

Atlas Energy is expected release its second quarter earnings results in the next month. Our earnings projection for the quarter is presently pegged at 83 cents, which increased 196.4% in the last 60 days. This reflects a projected year-over-year growth rate of 653.3%. Atlas Energy reported both top- and bottom-line beats in the previous quarter.

The first half of 2013 was quite productive for Atlas Energy. In the first quarter the partnership registered a 240% year-over-year increase in total production. The partnership’s presence in resource rich regions and strong performance of its E&P subsidiary, Atlas Resource Partners, L.P. (ARP) and midstream subsidiary, Atlas Pipeline Partners, L.P. (APL) will allow it to sustain this performance in the latter half.

In Jun 2013, Atlas Energy’s E&P subsidiary decided to acquire 466 billion cubic feet (Bcf) of gas from a subsidiary of E&P Energy LLC.  In addition, Atlas Energy will also acquire 45 Bcf of proved natural gas reserve from E&P Energy LLC.

These acquisitions will further boost the cash flow of the partnership. The partnership in fact raised its 2014 distribution guidance to the range of $2.50 to $2.80 per unit, up 115% from the current annualized rate of $1.24 per unit.

The Zacks Consensus Estimate for 2013 increased 136.3% in the last 60 days to $3.38 per share, reflecting a whopping year-over-year increase of 3,855.6%. The Zacks Consensus Estimate for 2014 increased 40.8% in the last 60 days to $4.21 per share, reflecting year-over-year projected growth of 24.6%.  

Other Stocks to Consider

Besides Atlas Energy, Cheniere Energy Partners LP. (CQP) also has a favorable Zacks Rank among others operating in the industry.  Cheniere Energy presently carries a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on ATLS

Read the Full Research Report on ARP

Read the Full Research Report on APL

Read the Full Research Report on CQP

Zacks Investment Research



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