UPDATE: Credit Suisse Initiates Outperform, $28 PT on Regency Energy Partners

Credit Suisse initiates Regency Energy Partners

with a rating of Outperform and a $28 price target as the company enters a capital growth stage. Credit Suisse says, "Regency provides investors with a relatively high current yield of 7.5% combined with modest growth that should equate to double-digit total return potential. Its assets generate stable and predominantly fee-based cash flow. RGP is entering a large capital growth period in which it plans to invest over $1b in its natural gas gathering and processing, and NGL segments. This should support distribution growth in the 4%+ range over the next three years. In the long term, we view a merger between Energy Transfer Partners (

) and Regency as a high probability, given a common ownership of their general partners by Energy Transfer Equity (

). RGP closed at $24.41 yesterday.