Mizuho Securities Reiterates Buy on Shell Midstream Partners (SHLX)

Mizuho Securities reiterated a Buy rating and $36.00 price target on Shell Midstream Partners, L.P. (NYSE: SHLX). SHLX continues to expect total dropdowns of $2.5- $2.9 B from 2017 to 2018.

Analyst Brian Zarahn commented, "Key earnings takeaways are a DCF beat, favorable Gulf of Mexico oil pipeline volume outlook and total asset dropdowns still anticipated at $2.5-$2.9 B in 2017 and 2018. Combining significant $3-3.5 B EBITDA dropdown inventory representing 10x 4Q16 run rate, low cost of capital, stable cash flow and healthy distribution coverage, SHLX has strong visibility to meet our 20% distribution CAGR estimate. On PEG-like ratio of DCF multiple/growth, valuation is reasonable at below 1x. While still early in its life cycle, SHLX would benefit from a proactive IDR restructuring to enhance post-2020 growth, in our view. Maintain our Buy rating and $36 price target."

For an analyst ratings summary and ratings history on Shell Midstream Partners, L.P. click here. For more ratings news on Shell Midstream Partners, L.P. click here.

Shares of Shell Midstream Partners, L.P. closed at $32.50 yesterday.

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