UPDATE: Jefferies Initiates Coverage on Targa Resources on Most Attractive Risk/Reward Skew

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

with a Buy rating and $85.00 price target. In the report, Jefferies noted, “TRGP offers the most attractive risk/reward skew among GP/LPs given: 1) its unfettered leverage to NGLS IDRs, 2) peer-leading div growth potential, 3) lowest net debt / EBITDA multiple in group; and 4) a fully loaded 14E EV/EBITDA that is >1x lower than peers. As TRGP stands to realize ~40% of NGLS distribution by 2016, pressuring the Partnership's cost of capital, we believe NGLS may eventually seek to acquire TRGP. We are initiating with a Buy and $85 PT.” Targa Resources Corp. closed on Tuesday at $68.09.