Analysts Quite Positive on Noble Midstream Partners

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Noble Midstream Partners L.P. (NYSE: NBLX) has received mostly positive analyst coverage upon the expiration of its quiet period. This is not unusual to see more Buy or Outperform rating after an initial public offering.

Noble Midstream Partners is a master limited partnership which was formed by Noble to own oil and gas gathering assets in Colorado’s DJ basin. It raised some $281 million after selling some 12.5 million units at $22.50 per unit. Its indicated price range was $19.00 to $21.00.

Barclays, Baird, JPMorgan, Merrill Lynch, Citigroup, Deutsche Bank, DNB Markets, Mizuho Securities, Mitsubishi UFJ Securities and Wells Fargo Securities were in the underwriting syndicate.

Deutsche Bank Securities started coverage with a Hold rating, issuing a $29 price target.

These were the following Buy and Outperform types of ratings we have seen so far on Monday:

  • Barclays started it as Overweight with a $35 price target.
  • Citigroup started it as Buy with a $33.50 price target.
  • JPMorgan started it as Overweight with a $34 price target.
  • Mizuho started it as Buy and with a $33 price target.
  • Robert W. Baird started it as Outperform with a $39 price target.

A report from MUFG’s US Equity Research team issued an Overweight rating and assigned a $32 price target. That report said:

We are initiating coverage on Noble Midstream Partners with an Overweight rating and a $32 price target, which implies a one-year IRR of 21.7%. We think the partnership’s existing asset base, which includes midstream service acreage dedications, coupled with its drop-down growth prospects provide a strong valuation upside with lower-than-average cash-flow risk compared with the broader midstream sector. In addition, NBLX launched its IPO with a completely unlevered balance sheet and $350M of liquidity, which provides several avenues with which to fund growth. The cash-flow stability and visibility offered by the partnership’s healthy relationship with its producer-sponsor results in limited downside for NBLX, in our opinion.

We would also point out that a recent filing showed that Tortoise Capital recently reported a 13.4% passive stake in Noble Midstream Partners. That was as of September 30, and was for the firm’s funds.

Noble Midstream Partners was up by 2.8% at $28.50, and the post-IPO range has been $26.00 to $28.99.

If 24/7 Wall St. uses the seven available price targets shown here, the consensus analyst price target would be $33.64.