DCP Midstream downgraded on Phillips 66 buyout at Mizuho

Mizuho analyst Gabriel Moreen downgraded DCP Midstream (DCP) to Neutral from Buy with a price target of $42, down from $45, after Phillips 66 (PSX) announced an agreement to purchase all of DCP’s publicly held common units for $41.75 per unit. The analyst says that while he would argue DCP’s intrinsic value could still be higher, investor sentiment seems satisfied with this 20% premium given Phillips 66’s majority ownership position and the recent commodity price retracement.