Zacks Investment Research downgraded shares of MarkWest Energy Partners, L.P. (MWE) from NEUTRAL to UNDERPERFORM on January 15, 2015, with a target price of $52.00.
Based upon the number of near-term challenges, we are lowering our recommendation for MarkWest Energy to Underperform from Neutral. The fuel transporter is faced with a higher degree of commodity price exposure than most MLPs. This is expected to limit its ability to deliver positive earnings surprises, especially considering the ongoing slump in oil and gas prices. As usual, we remain concerned about the non fee-based portion of the partnership's cash flows and unfavorable regulatory changes by the FERC. The pipeline operator's dependence on equity and debt markets for growth finance also remains an issue. Considering these factors, we see MarkWest as a risky bet from which ordinary investors should exit.
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