UPDATE: Bank of America Reiterates Buy Rating, Raises PT on Markwest Energy Partners LP Following Kinder Morgan JV Announcement

In a report published Tuesday, Bank of America analyst Gabe Moreen reiterated a Buy rating on Markwest Energy Partners LP MWE, and raised the price target from $70.00 to $74.00. In the report, Bank of America noted, “Concurrent with releasing 2Q13 results, MWE announced it entered into a JV with Kinder Morgan Energy Partners, LP. (KMP) that includes three different projects: 1) expanding natural gas processing capacity in the Utica Shale, 2) potentially expanding Gulf Coast natural gas liquids (NGL) fractionation capacity, and 3) most prominently, constructing an NGL pipeline from OH to LA. During its earnings call, mgmt stated the total capex cost for all three projects could be more than $2bn. Although mgmt noted the project will directly compete with the proposed Bluegrass Pipeline, a JV between Boardwalk Pipeline Partners, L.P. (BWP) and Williams(WMB), we think the KMP/MWE JV may have the inside track on becoming the second NGL pipeline out of the Marcellus/Utica to the Gulf Coast given MWE's control of NGL barrels in the Marcellus/Utica.” Markwest Energy Partners LP closed on Monday at $68.96.