UPDATE: Morgan Stanley Downgrades Crosstex Energy to Equal-Weight, Raises PT on More Balanced Risk/Reward

In a report published Wednesday, Morgan Stanley analyst Stephen J. Maresca downgraded the rating on Crosstex Energy XTXI from Overweight to Equal-Weight, but slightly raised the price target from $19.00 to $20.00. In the report, Maresca noted, “With our Diversified Natural Gas (i.e., C-Corp stocks) industry up ~20% YTD and EV/EBITDA and P/E multiples up 13% and 21% y/y, respectively (giving more credit to longer-term growth), we see a more balanced near-term risk-reward (1.2:1.0 bull/bear skew). We reiterate our longer-term Attractive industry view predicated on earnings growth of ~9% through 2015e, driven largely by volumetric and contracted midstream projects. However, with stock prices elevated, we are looking to be more selective...In this Playbook we are downgrading XTXI and TRGP to Equal-weight.” Crosstex Energy closed on Tuesday at $18.26.