Inter Pipeline price target rises to CAN$30
Published by Anna Nicklin,
Assistant Editor
World 鶹ýӳ,
Inter Pipeline Ltd. recently announced that it would expand its natural gas liquids business by acquiring Williams鶹ýӳ Canadian natural gas liquids midstream business for CAN$1.35 billion.
According to the Financial Post and The Cerbat Gem, Inter Pipeline Ltd. has had its price target lifted by researchers at TD Securities following this deal with Williams.
TD analyst, Linda Ezergailis is reported to have told clients that the deal could generate an approximate 5% increase in adjusted funds from operations per share, with price target hike to CAN$30 from CAN$27 per share.
The firm currently has a 鶹ýӳbuy鶹ýӳ rating on stock, however, TD Securities鶹ýӳ price target points to a potential upside of 10.09% from the company鶹ýӳs current price.
"The pending acquisition of the Williams Canada assets (assuming closing by the end of 3Q16) should provide immediate accretion, diversification, visibility of growth potential and positive leverage to recovering NGL prices,鶹ýӳ Ezergailis said.
She continued: 鶹ýӳOver the long-term, Inter Pipeline continues to be well-positioned to service additional oil sands volumes through cost-efficient bolt-on connections.
The Financial Post continued to claim: 鶹ýӳShe also said that number could increase to roughly 15% if commodity prices rebound.鶹ýӳ
She added: 鶹ýӳInvestors should find the combination of stable long-term cash flows, income and growth potential attractive.鶹ýӳ
According to The Cerbet Gem, other equities analysts have issued research reports about the company recently:
- CIBC reduced their price target on Inter Pipeline from CAN$30 to CAN$29 in a research report on 20 July.
- RBC Capital Markets upped their price target on Inter Pipeline from CAN$28 to CAN$30 in a report on 5 August.
- BMO Capital Markets upped their price target from CAN$24 to CAN$26 in a research report on 7 July.
- Raymond James Financial Inc. set a CAN$27.50 price target on Inter Pipeline in a report on 6 June.
- Royal Bank Of Canada raised their price target from CAN$28 to CAN$30 in a research report on 8 August.
David Gailson of Canaccord Genuity highlighted that this acquisition has exposure to commodity prices, noting that cash flows will likely fluctuate with commodity cycles as, while a portion of the assets鶹ýӳ ethane-ethylene production is sold to Nova Chemicals Corp., the remaining products will be sold to various North American counterparties.
鶹ýӳUntil the acquisition closes, Inter Pipeline has provided limited information relating to its future earnings potential, making it difficult to develop a firm opinion on the acquisition,鶹ýӳ Gailson said in a research note. 鶹ýӳThe acquisition also provides growth opportunities and has the potential to offer some additional synergies,鶹ýӳ he added.
Edited from various sources by
Sources: , ,Read the article online at: /business-news/19082016/inter-pipeline-price-target-rises-to-can30/
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