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Shares in terminal operator, asphalt refiner and bunker supplier NuStar Energy L.P. have been upgraded from 'hold' to 'buy' with a price target of $62.00 per share by Selman Akyol, an analyst at brokerage and investment banking firm Stifel.

In its report, Stifel said: "The Partnership posted its strongest first quarter results in the last five years in part due to the discontinuation of its asphalt business as well as stronger results in its fuels marketing segment. Also contributing to this quarter's success was contracting 5 million barrels of storage capacity at St. Eustatius. Coverage for the quarter was 0.91x and management reiterated its 2014 goal of returning to 1.0x coverage ratio.

"While the balance sheet remains leveraged at 4.4x debt to EBITDA, we believe the improving unit price offers management an opportunity to deleverage its balance sheet at some point. We are raising our rating to Buy and establishing a target price of $62.00 which is based on a yield target of 7.0% which compares favorably to their peer group average of 5.2%."

NuStar Energy L.P. announced earlier this week that first quarter net income increased by US$14.8 million, or 111.3 percent, to $28.1 million, up from $13.3 million, or $0.17 per unit, in the first quarter of 2013.

First quarter earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations was $126.7 million compared to first quarter 2013 EBITDA of $94.1 million.

Distributable cash flow from continuing operations available to limited partners during the first quarter of 2014 was $77.9 million, or $1.00 per unit, compared to $57.1 million, or $0.73 per unit, during the corresponding period in 2013.

In its 2014 earnings guidance, NuStar said that it expected second quarter results for its pipeline and fuels marketing segments to be higher than last year's second quarter primarily due to increased pipeline throughputs and improved results in its bunkering operations.

Shares of NuStar Energy L.P. closed at $57.90 per share on Thursday, up 0.95 on the previous day, with a 52 week range of $36.15 - $57.94.