UPDATE: Citigroup Downgrades American Midstream Partners to Neutral, Lowers PT

In a report published Wednesday, Citigroup downgraded its rating on American Midstream Partners LP

from Buy to Neutral, and slightly lowered its price target from $23.00 to $22.00. Citigroup noted, “We are lowering our price target to $22.00 and downgrading AMID to Neutral from Buy following another disappointing quarter and reduced estimates. In the current low NGL margin environment, we believe the partnership's small size, low coverage ratio, and growing leverage limits near-term upside. Additionally, we estimate ~33% of the partnership's 2012 gross margin is commodity sensitive and will be impacted by a hedge book that is priced 13% lower in 2013. Specifically, the partnership has hedged 76% of its 2012 NGL exposure at a weighted average price of $1.37/gal and 70% of its 2013 NGL exposure at a weighted average price of $1.19/gal.” American Midstream Partners LP closed on Tuesday at $21.00.