UPDATE: J.P. Morgan Initiates Coverage on Inergy, L.P. with Neutral Rating, $21 PT

In a report published Wednesday, J.P. Morgan & Co. initiated coverage on Inergy, L.P. NRGY with a Neutral rating and $21.00 price target. J.P. Morgan noted, “We are initiating coverage of NRGY with a Neutral rating and YE13 $21/unit price target. Although NRGY historically focused on retail propane distribution, the partnership transformed it into a more diversified MLP with operations across the natural gas and natural gas liquids midstream space after several years of acquisitions and major capital investments. However, after facing challenges within both propane distribution (warm winter depressing demand) and natural gas storage (underperformance at Tres Palacios), NRGY restructured the balance sheet through divestitures and the IPO of the midstream operations. Although we are encouraged to see stability and the promise of future distribution growth after this restructuring, we are on the sidelines due to the potential negative reaction to NRGY's guided distribution cut post the special SPH unit distribution.” Inergy, L.P. closed on Tuesday at $20.29.