Sunoco Logistics Pluses Priced In

Sunoco Logistics Partners L.P. (SXL - Analyst Report), a master limited partnership (MLP), acquires, owns and operates a geographically diverse portfolio of refined product and crude oil pipelines and terminal facilities. Its facilities are located in 12 states in the Northeast, the Midwest and the Southwest of the country. As of December 31, 2007, Sunoco, Inc. (SUN - Analyst Report) owns 43.4% of the partnership interest, including a 2% general partner interest, and accounts for approximately 23% of the partnership's total revenue.

Sunoco Logistics reported robust third-quarter results, reflecting growth in all its segments. Importantly, the partnership increased its quarterly distribution by 13.5% year-over-year to the annualized rate of $3.86 per unit. With its stable fee-based revenue, geographically diverse assets, and strong business fundamentals, Sunoco Logistics offers investors an opportunity to capture income growth through steadily rising cash distributions and capital appreciation.

However, our Hold recommendation remains unchanged, as we continue to believe that its premium valuation relative to the peer group adequately reflects the partnership's distribution-growth prospects.

Read the full analyst report on SXL