UPDATE: Citigroup Upgrades Spectra Energy Partners LP to Buy, Reiterates $33 PT

In a report published Monday, Citigroup upgraded its rating on Spectra Energy Partners LP

from Neutral to Buy, and reiterated its $33.00 price target. Citigroup noted, “We are upgrading SEP to Buy and maintaining our target price of $33.00. Our TP assumes SEP can increase the annual distribution to $1.98/unit 12 months from now and that units trade at a 6% yield. Units have traded down ~11% over the past month on Fiscal Cliff and taxation worries, resulting in units currently trading at a ~7.1% yield and presenting an attractive buying opportunity for an MLP with a significant amount of cash flows supported stable long-term contracts, a strong general partner (GP), assets located in demand-growth growth regions, and evidence that accretive drop-down acquisitions are back on the table following last month's M&N US Pipeline acquisition.” Spectra Energy Partners LP closed on Friday at $27.65.