UPDATE: Bank of America Lowers PT on Inergy Following CMLP-NRGM Merger Announcement

In a report published Friday, Bank of America analyst Gabe Moreen reiterated a Buy rating on Inergy NRGY, but lowered the price target from $25.00 to $18.00.

In the report, Bank of America noted, “On 6 May 2013, Crestwood Midstream Partners, LP (CMLP; -6-; $24.25) and NRGM announced a proposed merger in a multi-step cash and equity transaction. Ultimately, the transaction transforms NRGY into a pure-play general partner (GP) of NRGM, which should drive a higher cash distribution growth rate at the NRGY level. We expect the new mgmt at NRGY/NRGM entity to be aggressive in growing the partnership, which we view positively as MLP GPs benefit from increased capital spend and equity issuance at underlying MLPs. Overall, the transaction greatly enhances NRGM's scope and scale and creates some synergies in the Marcellus region.”

Inergy closed on Thursday at $14.70.