UPDATE: Jefferies Initiates Coverage on DCP Midstream Partners LP with Buy Rating, $58 PT on Ongoing Strategic Transformation

In a report published Wednesday, Jefferies analyst Christopher Sighinolfi initiated coverage on

with a Buy rating and $58.00 price target. In the report, Jefferies noted, “DPM is in the midst of a strategic transformation from commodity-driven G&P to diversified midstream provider. Its symbiotic affiliation with DCP Midstream, LLC provides ongoing drop-down opportunities to compliment its growing inventory of largely fee-based expansions. Direct commodity hedges insulate cash flows while a BBB- balance sheet ensures access to capital. We project a ~7.25% distribution CAGR through 2017 & are initiating with a Buy rating.” DCP Midstream Partners LP closed on Tuesday at $47.93.