Analyst Actions: Archrock Partners Upgraded to Outperform by RBC, Price Target Lifted to $19 From $18
7:06 AM ET, 08/23/2017 - MT Newswires
07:06 AM EDT, 08/23/2017 (MT Newswires) -- Archrock Partners (APLP) received an investment-rating upgrade Wednesday from RBC Capital Markets to outperform from sector perform as the firm also boosted its price target on the natural-gas-compression partnership's units in a bullish note on the partnership following better-than-expected Q2 results earlier this month.
The new price target is $19 per share, up from $18. This compares with a Tuesday closing price of $13.20.
In a note to clients, RBC highlighted that Archrock Partners is the largest gas-compression master-limited partnership and said "we think it has the best risk/reward among the group."
The firm noted Archrock Partners cut its distribution last year by 50% and now carries distribution coverage of
more than 1.8 times while focused on de-levering before resumption of distribution growth.
RBC said it is estimating the partnership's debt leverage will improve to around four times by 2019 from 5.2 times currently. "With that, we think APLP can resume distribution growth by 2019, with distribution coverage still at healthy levels," the firm said.
It also highlighted that Archrock Partners just raised about $50 million in public equity, which it noted "provides visibility on funding for increased new order activity."
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