How ET's Acquisition Could Bolster CEQP's Market Access And Financial Health: Analyst On The $7.1B Deal
Portfolio Pulse from Lekha Gupta
Truist Securities analyst Neal Dingmann downgraded Crestwood Equity Partners LP (CEQP) to Hold from Buy with a lowered price target of $28 from $31. He favors CEQP's acquisition by Energy Transfer LP (ET) as the larger proforma company is expected to benefit from improved growth prospects. The acquisition deal is an all-equity of around $7.1 billion, including the assumption of $3.3 billion of debt. The analyst expects CEQP's G&P assets to benefit from increased direct access to markets for gas, fractionation, and NGLs, and believes the deal will boost CEQP's balance sheet/re-financing opportunities.
August 18, 2023 | 5:48 pm
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NEGATIVE IMPACT
Crestwood Equity Partners LP (CEQP) has been downgraded to Hold from Buy by Truist Securities analyst Neal Dingmann, with a lowered price target of $28 from $31. The analyst expects the company's acquisition by Energy Transfer LP (ET) to improve its growth prospects and financial health.
The downgrade of CEQP by the analyst and the lowering of the price target indicates a less optimistic outlook for the company's stock in the short term. However, the acquisition by ET is expected to improve the company's growth prospects and financial health, which could have a positive impact in the long term.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Energy Transfer LP (ET) is acquiring Crestwood Equity Partners LP (CEQP), a move favored by Truist Securities analyst Neal Dingmann. The analyst expects the larger proforma company to benefit from improved growth prospects and increased market access.
The acquisition of CEQP by ET is expected to benefit the latter due to the increased scale and diversification. This could lead to improved growth prospects and increased market access, which could have a positive impact on ET's stock in the short term.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 100