MPLX To Redeem Senior Notes Worth $750M, Street Sees 13% Upside

MPLX LP on Tuesday announced that it will redeem the entire $750 million outstanding principal amount of 5.25% senior notes which has a maturity date of Jan. 15 2025. The redemption amount will also include the senior notes worth $42 million issued by Andeavor Logistics and Tesoro Logistics Finance.

MPLX (MPLX) will redeem the aforementioned senior notes on Jan. 15 2021, at a price equal to 102.625% of the principal amount. The company further stated that “The regular semiannual interest payment due on the 2025 senior notes on Jan. 15, 2021, will be paid in the usual manner to holders of record at the close of business on Jan. 1, 2021.”

Earlier in November, MPLX reported better-than-expected 3Q results. Its 3Q top and bottom lines exceeded analysts’ expectations. Meanwhile, it generated net cash flow of $1.2 billion from operational activities. (See MPLX stock analysis on TipRanks)

Following the company’s earnings release, Raymond James analyst Justin Jenkins reiterated a Hold rating on the stock.

In a note to investors, Jenkins said, “The impacts from COVID-19 (e.g., lower refinery runs impacting L&S and G&P volume/price issues have clearly been headwinds for MPLX. That said, as evidenced by solid 3Q20 results, the partnership has gotten through the worst across most of its assets – though the market likely needs to see more financial strength before the stock re-rates closer to prior levels.”

Overall, consensus among analysts is a Moderate Buy based on 4 Buys and 3 Holds. The average price target stands at $24.40 and implies upside potential of about 13.4% to current levels. So far this year, shares of MPLX have depreciated by 15.5%.

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