SHLX - Shell Midstream cut from Buy at Citi on more muted total return profile
Shell Midstream Partners (NYSE:SHLX) slips as Citi downgrades units to Neutral from Buy with a $12 price target, cut from $17, believing the partnership will prioritize organic growth and potential stock buybacks over drop-downs and dividend increases. Citi analyst Timm Schneider believes the Shell Midstream "story remains a compelling one for income oriented investors," but some other "high yielders" among North America energy MLPs offer a better total return profile. Schneider suggests an MLP pair trade with MPLX (MPLX -1.4%), seeing more price return upside due to favorable northeast processing economics and a rebound to a more normal refined product and crude oil volume environment in 2022. Citi also reaffirms Buy ratings for NuStar Energy (NS -2.4%) and PBF Logistics (PBFX -2.5%) but cites more conservative EBITDA estimates in trimming price targets to $19 from $21 and to $14 from $17, respectively. Shell Midstream cut distributions earlier this year, but raising
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Shell Midstream cut from Buy at Citi on more muted total return profile