UPDATE: Wunderlich Initiates Coverage on Markwest Energy Partners

In a report published Wednesday, Wunderlich Securities analyst David Askew initiated coverage on Markwest Energy Partners MWE with a Buy rating, establishing a $78.00 price target. According to the report, the analysts believe the units offer an attractive balance of yield and growth with accelerating distribution increases expected in 2H14 on the back of a multi-billion dollar CapEx program around its leading footprint in the Marcellus and Utica. “The units had been a favorite among investors, appreciating 48% from the end of 2012 to the 2014 guidance announcement in mid-November 2013, but have since underperformed, falling 11%,” the report noted. “However, we believe 2014 DCF will exceed Street estimates and expect MWE to rally through 2014 as cash flows accelerate and visibility on double-digit distribution growth emerges. Incremental project and contract announcements can provide further upside catalysts.” Some key points from the report included: -”We see upside to expectations in 2014/2015” -”CapEx to drive accelerating cash flow growth” -”Project announcements could provide catalysts” -”High-quality asset base with growing fee-based margin and attractive cost of capital” MWE closed Tuesday at $68.08 with shares trading up at 1.28 percent.