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Analyst Recommendations for ETP, ETE, and SXL before 4Q15 Earnings

Kurt Gallon

What to Expect from ETE’s, ETP’s, and SXL’s 4Q15 Earnings

(Continued from Prior Part)

Analyst recommendations

In this final part of our series, we’ll look at what Wall Street analysts recommend for the three major MLPs (master limited partnerships) of the Energy Transfer Group—Energy Transfer Partners (ETP), Energy Transfer Equity (ETE), and Sunoco Logistics Partners (SXL)—before their 4Q15 earnings announcements.

Energy Transfer Partners

Of the analysts surveyed, 73.3% rate ETP a “buy,” and the remaining ~26.7% rate it a “hold.”  ETP’s consensus target price of $39.3 implies a price return of 44.1% for the next 12 months as of February 16, 2016, when its closing price was $27.30. The most recent recommendations, by RBC Capital Markets and Barclays, rate ETP as “outperform” and “overweight,” respectively, which are equivalent to “buy.” They have assigned ETP target prices of $33 and $42, respectively.

Energy Transfer Equity

Similar to ETP, 77.8% of analysts surveyed rate ETE a “buy,” and the remaining ~22.2% rated it a “hold.” ETE’s consensus target price of $18.2 implies a price return of 200.3% for the next 12 months as of February 16, 2016, when its closing price was $6.10. The two most recent recommendations, by Evercore and Morningstar, rate ETE as “buy.” Evercore has assigned ETE a target price of $29.

Sunoco Logistics Partners

Of the analysts surveyed, 62.5% rate SXL a “buy” and the remaining ~37.5% rate it a “hold.” SXL’s consensus target price of $33 implies a price return of 65.4% for the next 12 months as of November 16, 2015, when its closing price was $19.95. The most recent recommendations, by RBC Capital Markets and Robert Baird, rate SXL as “sector perform” and “neutral,” respectively, which are equivalent to “hold.” They have assigned SXL targets of $23 and $21, respectively.

Key ETFs

Investors can also include these MLPs in their portfolio through ETFs (exchange-traded funds). Together, ETP and SXL account for 15.2% of the Alerian MLP ETF (AMLP). ETE forms 0.45% of the Guggenheim Raymond James SB-1 Equity ETF (RYJ).

For more pre-earnings series on midstream companies, check out Market Realist’s Master Limited Partnerships page.

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