The Zacks Analyst Blog Highlights: Simon Property Group, PetroChina, Exxon
Mobil, NGL Energy Partners and Calumet Specialty Products Partners
CHICAGO, April 9, 2013
CHICAGO, April 9, 2013 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Simon Property Group Inc.
(NYSE:SPG), PetroChina Co. Ltd. (NYSE:PTR), Exxon Mobil Corp. (NYSE:XOM), NGL
Energy Partners L.P. (NYSE:NGL) and Calumet Specialty Products Partners L.P.
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Here are highlights from Monday's Analyst Blog:
Simon Property Soars to 52-Week High
Shares of Simon Property Group Inc. (NYSE:SPG) touched a 52-week high of
$166.30 on Friday, Apr 5, 2013, as it gained momentum from
better-than-expected fourth-quarter 2012 results. The closing price of this
retail real estate investment trust (REIT) on Apr 5, 2013 was $166.23,
representing a year-to-date return of 4.8%. The average trading volume over
the last 3 months was 1.95 million shares.
Despite hitting its 52-week high, this Zacks Rank #2 (Buy) stock has plenty of
upside left given its strong estimate revisions over the last 60 days.
Simon Property reported strong fourth-quarter 2012 results with FFO (funds
from operations) per share substantially surpassing the Zacks Consensus
Estimate. The company is one of the leading publicly traded retail real estate
companies in the U.S. with assets in almost all retail distribution channels.
Furthermore, its international presence gives it a more sustainable long-term
growth prospect than its domestically focused peers.
Simon Property has one of the strongest comparable sales per square foot in
the industry. Its upscale properties and their strategic locations attract a
large number of high-end retailers for opening their outlets.
On Feb 4, Simon Property reported fourth-quarter 2012 FFO per share of $2.29,
substantially beating the Zacks Consensus Estimate by 12 cents. This also
compared favorably with the year-ago quarter's FFO per share of $1.91.
For full year 2012, FFO stood at $2.9 billion or $7.98 per share, well ahead
of $2.4 billion or $6.89 per share reported last year. The full-year earnings
also surpassed the Zacks Consensus Estimate of $7.56 per share.
The results were aided by increase in rental revenue and occupancy. In
addition, the company has a solid balance sheet with adequate liquidity and
has announced a 21.1% year-over-year hike in its quarterly dividend rate,
reflecting a hike for 6 straight quarters. Therefore, with strong
fundamentals, robust growth projections and a healthy dividend yield, the
stock offers an enticing upside potential going forward.
PetroChina Upgraded to Neutral
We have upgraded Chinese energy giant PetroChina Co. Ltd. (NYSE:PTR) to
Neutral from Underperform, reflecting a balanced risk/reward profile.
Why the Upgrade?
Going forward, the main growth driver for PetroChina will likely be its
leverage to the fast-growing Chinese market and the ever expanding
market/resource base. Being one of two Chinese integrated oil companies,
PetroChina is well-positioned to capitalize on the country's favorable trends.
The Beijing-based integrated is also successfully expanding its footprint in
strategic locations like Canada and Australia.Detailed Analysis
China's impressive economic growth has significantly increased its demand for
oil, natural gas and chemicals. This growth momentum presents attractive
opportunities for industry players (like PetroChina) that can meet the
country's fast-growing energy needs. Additionally, we expect the company – the
world's biggest listed oil producer by volume ahead of Exxon Mobil Corp.
(NYSE:XOM) – to benefit from attractive growth prospects in the downstream and
natural gas sectors.
We like PetroChina's recent natural gas deals in Canada and Australia. The
Chinese behemoth's plans – to form a joint venture in Canada's Alberta to
develop natural gas/condensates assets and to purchase interests in the
proposed Western Australian Browse liquefied natural gas (LNG) project – will
provide it with a global resource and market base, making the company a
leading international energy player. Additionally, these ventures will also
provide a hedge against the uncertain Chinese product pricing policies.
However, we are concerned about prospects for the company's oil production
growth, considering its heavy exposure to significantly mature-producing
areas. Other near-term headwinds include high-priced gas imports amidst low
domestic gas sale prices and an ambitious investment program.
Stocks That Warrant a Look
While we expect PetroChina to perform in line with its peers and industry
levels in the coming months and advice investors to wait for a better entry
point before accumulating shares, one can look at NGL Energy Partners L.P.
(NYSE:NGL) and Calumet Specialty Products Partners L.P. (Nasdaq:CLMT) as good
buying opportunities. These oil refining and marketing partnerships – sporting
a Zacks Rank #1 (Strong Buy) – have solid secular growth stories with
potential to rise significantly from current levels.
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