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The Zacks Analyst Blog Highlights: Simon Property Group, PetroChina, Exxon Mobil, NGL Energy Partners and Calumet Specialty Products Partners

Zacks Equity Research

For Immediate Release

Chicago, IL – April 9, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Simon Property Group Inc. (SPG), PetroChina Co. Ltd. (PTR), Exxon Mobil Corp. (XOM), NGL Energy Partners L.P. (NGL) and Calumet Specialty Products Partners L.P. (CLMT).

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Here are highlights from Monday’s Analyst Blog:

Simon Property Soars to 52-Week High

Shares of Simon Property Group Inc. (SPG) touched a 52-week high of $166.30 on Friday, Apr 5, 2013, as it gained momentum from better-than-expected fourth-quarter 2012 results. The closing price of this retail real estate investment trust (:REIT) on Apr 5, 2013 was $166.23, representing a year-to-date return of 4.8%. The average trading volume over the last 3 months was 1.95 million shares.

Despite hitting its 52-week high, this Zacks Rank #2 (Buy) stock has plenty of upside left given its strong estimate revisions over the last 60 days.

Growth Drivers

Simon Property reported strong fourth-quarter 2012 results with FFO (funds from operations) per share substantially surpassing the Zacks Consensus Estimate. The company is one of the leading publicly traded retail real estate companies in the U.S. with assets in almost all retail distribution channels. Furthermore, its international presence gives it a more sustainable long-term growth prospect than its domestically focused peers.

Simon Property has one of the strongest comparable sales per square foot in the industry. Its upscale properties and their strategic locations attract a large number of high-end retailers for opening their outlets.

On Feb 4, Simon Property reported fourth-quarter 2012 FFO per share of $2.29, substantially beating the Zacks Consensus Estimate by 12 cents. This also compared favorably with the year-ago quarter’s FFO per share of $1.91.

For full year 2012, FFO stood at $2.9 billion or $7.98 per share, well ahead of $2.4 billion or $6.89 per share reported last year. The full-year earnings also surpassed the Zacks Consensus Estimate of $7.56 per share.

The results were aided by increase in rental revenue and occupancy. In addition, the company has a solid balance sheet with adequate liquidity and has announced a 21.1% year-over-year hike in its quarterly dividend rate, reflecting a hike for 6 straight quarters. Therefore, with strong fundamentals, robust growth projections and a healthy dividend yield, the stock offers an enticing upside potential going forward.

PetroChina Upgraded to Neutral


We have upgraded Chinese energy giant PetroChina Co. Ltd. (PTR) to Neutral from Underperform, reflecting a balanced risk/reward profile.

Why the Upgrade?

Going forward, the main growth driver for PetroChina will likely be its leverage to the fast-growing Chinese market and the ever expanding market/resource base. Being one of two Chinese integrated oil companies, PetroChina is well-positioned to capitalize on the country’s favorable trends. The Beijing-based integrated is also successfully expanding its footprint in strategic locations like Canada and Australia.

Detailed Analysis

China’s impressive economic growth has significantly increased its demand for oil, natural gas and chemicals. This growth momentum presents attractive opportunities for industry players (like PetroChina) that can meet the country’s fast-growing energy needs. Additionally, we expect the company – the world's biggest listed oil producer by volume ahead of Exxon Mobil Corp. (XOM) – to benefit from attractive growth prospects in the downstream and natural gas sectors.

We like PetroChina’s recent natural gas deals in Canada and Australia. The Chinese behemoth’s plans – to form a joint venture in Canada's Alberta to develop natural gas/condensates assets and to purchase interests in the proposed Western Australian Browse liquefied natural gas (LNG) project – will provide it with a global resource and market base, making the company a leading international energy player. Additionally, these ventures will also provide a hedge against the uncertain Chinese product pricing policies.

However, we are concerned about prospects for the company’s oil production growth, considering its heavy exposure to significantly mature-producing areas. Other near-term headwinds include high-priced gas imports amidst low domestic gas sale prices and an ambitious investment program.

Stocks That Warrant a Look

While we expect PetroChina to perform in line with its peers and industry levels in the coming months and advice investors to wait for a better entry point before accumulating shares, one can look at NGL Energy Partners L.P. (NGL) and Calumet Specialty Products Partners L.P. (CLMT) as good buying opportunities. These oil refining and marketing partnerships – sporting a Zacks Rank #1 (Strong Buy) – have solid secular growth stories with potential to rise significantly from current levels.

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Read the analyst report on XOM

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