Magellan Midstream Partners (MMP) Update - June 11

Magellan Midstream Partners (MMP) Update - June 11

Postby dan_s » Fri Jun 11, 2021 8:50 am

From our friends at Stifel

Magellan Midstream Partners, L.P. (MMP, $53.53, Buy; Target $54.00)
Magellan Continuing to Focus on Value, Not Size - Selman Akyol
- Magellan announced the sale of 26 independent refined product terminals (primarily connected to the Colonial & Plantation pipelines) to Buckeye Partners for $435 million. We view the sale favorably given these assets are not located around MMP's core Gulf Coast / Midwest product distribution system. Additionally, proceeds from this divestiture (along with the previous announced MVP JV interest sale) should provide the partnership with significant excess cash and optionality to potentially buyback units. While MMP has had a solid track record of divesting assets over the last several years, we believe management is focused on creating value, not necessarily becoming a larger partnership. We continue to favor the MMP story given its conservative financial profile, flexibility of divestiture proceeds and the normalization of refined product demand. We are maintaining our Buy rating and increasing our target price to $54.00 from $50.00.

IMO MMP has the highest safety rating in our High Yield Income Portfolio, so if you primary investment goal is dividend yield, MMP is for you.
Dan Steffens
Energy Prospectus Group
Posts: 25582
Joined: Fri Apr 23, 2010 8:22 am

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