Saying the slower distribution rates of Copano Energy (Nasdaq:CPNO), they should underperform their peers, said Barclays (NYSE:BCS), which downgraded them from "Overweight" to "Equalweight."
"We downgrade CPNO due to slower distribution growth prospects compared to its Overweight rated peers: Given expected tight distribution coverage in 2010 and 2011 we estimate CPNO will leave its distribution flat and resume growth at 2-5% level in 2012-2014, based on our assumption that it can successfully deploy $150-200 mm of growth capital per year at 5x return multiple. While this requires strong execution skill, which CPNO has demonstrated in the past, we note that CPNO's growth forecast falls below our Overweight rated G&P MLPs that have either started to raise distribution or should be in a position to raise distribution in 2011 and beyond by 5-10% range," said Barclays.
Earnings per share estimates were lowered by Barclays for FY11 from $0.06 to -$0.09 and FY12 from $0.46 to $0.26.
Morgan Keegan also downgraded them from "Outperform" to "Market Perform."
Copano closed at $28.76, falling $0.80, or 2.71 percent.
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