We are upgrading MarkWest Energy Partners (MWE) to Outperform from Neutral, reflecting its promising future prospects. The master limited partnership’s (MLP) targeted growth capital investments since 2006 have been driving its strong, long-term volume growth.
We continue to like MarkWest for its high-quality and diverse portfolio of midstream assets, as well as its proven track record of supporting producers in the development of shale plays and the steady improvement in its liquidity/cash flow position. Furthermore, with 192% distribution growth since the IPO in May 2002, we are confident of the partnership’s total return potential.
As such, we view MarkWest units as an attractive investment and upgrade it to Outperform. Our $66 price objective reflects a multiple of 21.2X trailing twelve-month cash flow.
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