Weather Weights Down Ferrellgas

Citigroup has published a research report on Ferrellgas Partners LP FGP as the weather wears down on the company. In the report, Citigroup writes "While weather conditions remained challenging in November, a cold December should somewhat offset warmer than normal conditions experienced throughout beginning of the heating season. Margins of $0.93/gal also came in below our expectation of $0.97/gal and last year's margin of $0.96/gal. While we expect volumes to vary depending on weather, margin deterioration is more concerning when taking into consideration the partnership's leverage of ~4.5x Total Debt-to-EBITDA. If both margins and volumes remain depressed LTM leverage could prove to be a headwind for the partnership throughout the rest of 2011 and limit its ability to execute accretive acquisitions." Citigroup maintains its Hold rating and $25 price target. Ferrellgas Partners closed Friday at $26.24.