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UPDATE: Morgan Stanley Initiates Western Gas at Overweight on Long-Term Potential

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Morgan Stanley initiated overage on Western Gas (NYSE: WGP) with an Overweight rating and a $36 price target.

Morgan Stanley said, "WGP offers leverage to WES's 15%+ distribution growth through ownership of the GP units and incentive distribution rights. Despite WGP's owning ~45% of the LP units, we still see a growth trajectory of 36% (4Q/4Q), 33%, 30% in 2013-15, implying a growth multiplier 2x+ as WES recently entered the 50/50 splits (sweet spot for GP growth). WGP's 32% distribution growth CAGR over the next three years compares favorably to other GPs under our coverage (MLPs and C-Corps) at 19% growth. Also, we see lower risk and better sustainability to the outlook than at peers."

Western Gas closed at $47.63 on Wednesday.

Latest Ratings for WGP

Jul 2016CitigroupMaintainsNeutral
Jul 2016Janney CapitalInitiates Coverage onBuy
Jun 2016Mitsubishi UFJInitiates Coverage onNeutral

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