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Citigroup Reiterates Neutral Rating, $20.50 PT on ECA Marcellus Trust I

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Energy Corp. of America Launches Exchange Offer of ECT for NGT Units
UPDATE: Citi Lowers ECA Marcellus Trust's PT

In a report published Wednesday, Citigroup reiterated its Neutral rating and $20.50 price target on ECA Marcellus Trust I (NYSE: ECT).

Citigroup noted, “Our investment opinion reflects our view that these units offer investors a relatively attractive yield but limited potential for cash distribution growth in 2012 and beyond. Overall, ECT should appeal to income oriented investors seeking exposure to natural gas prices. As such, the investment proposition is shifting from a Development focused trust to a Commodity focused trust. More specifically, looking ahead, we believe upside for ECT units is highly linked to strength in natural gas prices given that production volumes will begin to decline in the second half of 2012 and remain stable at best. In the context, of the current supply demand dynamic for natural gas in the lower 48 states there is not much opportunity for upside. In the near term, we caution investors that short-term absolute performance could be challenging due to continued volatility in natural gas prices.”

ECA Marcellus Trust I closed on Tuesday at $21.88.

Posted-In: CitigroupAnalyst Color Reiteration Analyst Ratings

 

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