UPDATE: Stifel Nicolaus Cuts PT to $21 on QR Energy Following Mixed Q3
Stifel Nicolaus reiterated its Buy rating on QR Energy (NYSE: QRE) but lowered its price target from $23 to $21.
Stifel Nicolaus commented, “Based on 4Q12 production guidance, and our lower estimated realized price, we are lowering our 4Q12 and 2013 distributable cash flow per unit estimates to $0.517 and $2.229, respectively, which implies a 1.1x and 1.14x distribution coverage ratio, assuming a flat distribution. … QRE is currently trading at 7.8x EV/2013 EBITDA, a 3% discount to our peer group. Due to limited visibility on near-term distribution growth, we believe the units will continue to trade at a discount to our peer group. As such, we are lowering our target price 9% to $21 per unit, which assumes the shares maintain a 5% discount based on our implied EV/2013E EBITDA peer group average."
QR Energy closed at $18.00 on Thursday.
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