- RBC Capital Markets analyst Elvira Scotto increased the price target of Magellan Midstream Partners LP (NYSE:MMP) to $66 from $59 and downgraded to Sector Perform from Outperform.
- The analyst sees the proposed acquisition of MMP by ONEOK Inc (NYSE:OKE) as positive but downgraded the stock as it was trading close to the deal price.
- This week, Magellan and ONEOK executed a definitive merger agreement in which ONEOK will acquire all outstanding units of Magellan in a cash-and-stock transaction valued at approximately $18.8 billion.
- The agreement includes $25 in cash and 0.6670 shares of ONEOK common stock for each outstanding Magellan common unit.
- Scotto updated the company’s estimates following Q1 2023 results reported earlier this month.
- MMP Q1 revenues of $869.7 million topped the consensus of $723.5 million, and Adjusted EPS of $1.32 exceeded the consensus of $1.19.
- The analyst now expects adjusted EBITDA of $1.53 billion (vs. $1.50 billion earlier) in 2023 and $1.56 billion in 2024.
- Scotto introduced a 2025 adjusted EBITDA estimate of $1.60 billion.
- Price Action: MMP shares are trading higher by 0.77% at $61.85 on the last check Wednesday.
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