Capital Product Partners coverage begun with a buy

Kalogiratos

Capital Product Partners is initiated with a Buy rating and $2.75 price target at B. Riley FBR, which says the MLP offers the potential for higher distributable cash generation with a strong base of low-risk cash flows.

CPLP operates a diverse fleet of container, tanker and dry bulk vessels under a combination of spot and long- and medium-term charter rates, and has a supportive sponsor that provides a steady source of high-return drop-down assets, B. Riley says.

Based on the current 78% charter coverage for 2018 and 63% charter coverage for 2019, as well as an average charter duration of 4.7 years, B. Riley believes CPLP’s current agreement should keep EBITDA stable.

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