Teekay Offshore Partners shares get a boost from Citi upgrade and higher price target

Teekay shares rise on upgrade

MINNEAPOLIS — Shares of oil and natural gas transportation company Teekay Offshore Partners LP rose on Wednesday after an analyst upgraded the stock.

THE SPARK: Citi analyst John K. Tysseland upgraded the partnership units to “Buy/High Risk” from “Hold/Speculative Risk,” and raised his price target to $26, from $15.

THE BIG PICTURE: Teekay shares have suffered in part because of an equity offering (which dilutes the holdings of existing owners). It was the second offering this year by the Bermuda-based partnership, which was formed by Teekay Corp.

THE ANALYSIS: Tysseland wrote that Teekay Offshore Partners should see better operating performance. And he said Teekay announced on Tuesday that its general partner has offered to sell it three new shuttle tankers. Teekay management said it has enough money to buy those ships without raising additional equity.

Also, with the recent share price drop, Teekay’s dividend is yielding almost 9 percent.

SHARE ACTION: Up 93 cents, or 4.4 percent, to close at $22.18.

(This version CORRECTS Corrects 3rd graf by removing reference to earnings, which were for Teekay Corp., not Teekay Offshore Partners. Updates with closing share price.)