Enterprise Products Partners: Still Good, Just A Little Less So Now (Rating Downgrade)

Enterprise Products Partners (EPD) is downgraded from Strong Buy to Buy as valuation has risen and yield is now less compelling versus peers. Neches River Terminal Phase-2 expansion boosts capacity, with potential $250M+ annual EBIT impact, especially if spot rate premiums persist. Q1 saw operating margins improve to 13.17% despite revenue decline and a temporary working capital drag on cash flows. EPD's yield remains attractive but is now only modestly above peers, with Energy Transfer (ET) and MPLX offering stronger income and growth.