UPDATE: JP Morgan Initiates Pacific Coast Oil Trust with Neutral, $17 PT; Shares Fairly Valued

JP Morgan initiates its coverage on Pacific Coast Oil Trust

with a Neutral rating and a price target of $17 a share. JP Morgan notes, "Approximately 97% of the assets are oily and 84% are proved developed, leading to a high producing, low decline, mature asset base. Due to the location of the producing assets, ROYT's California crude production receives Brent pricing, which currently trades at a premium to WTI. Additionally, the trust has hedged 60% of production through 1Q14 at $115/bbl. However, at current levels, we view ROYT as fairly valued according to our discounted cash flow model (Brent prices have fallen more than 15% since the IPO)." ROYT closed at $18.04 on Monday.