UPDATE: Citigroup Initiates Seadrill Partners at Buy on Cash Flow, Fleet Quality

Citigroup raised its rating on Seadrill Partners (NYSE: SDLP) with a Buy rating and a $30 price target

Citigroup noted, "SDLP already trades at a hefty valuation premium due to its: (1) fleet comprised solely of new and technologically advanced rigs, (2) attractive cash flow payout structure, and (3) lowrisk path to growth through the dropdown of additional rigs from parent Seadrill Limited. We initiate with a Buy rating and $30 price target based on applying a 5.3% yield to our cash distribution estimate of $1.59 per unit (beginning 12 months forward from 3Q12)."

Seadrill Partners closed at $23.10 on Monday.

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