UPDATE: Wunderlich Securities Downgrades Vanguard Natural Resources LLC On Continued Primary Headwind

In a report published Wednesday, Wunderlich Securities analyst Abhishek Sinha downgraded the rating on

from Buy to Hold, and lowered the price target from $34.00 to $29.00. In the report, Wunderlich Securities noted, “Vanguard Natural Resources (VNR) reported 2Q Adj. EBITDA of $97.7mm, missing our and the Street's estimate of $103mm. Although production at 315Mmcfe/d was in line with our est., low NGL realizations more than offset an 18% sequential rise in production. We believe that lower NGL prices would continue to be a primary headwind for VNR as less than 10% of its NGL production is hedged. Poor liquidity in the NGL market and a backwardated curve would make it even more difficult for VNR to layer on additional NGL hedges. Although VNR has been successful in growing production through acquisitions, a consistently below 1.0x coverage ratio does not warrant it to trade at a significant premium to its peers. Accordingly, we are downgrading the stock to Hold and reducing our price target to $29.” Vanguard Natural Resources LLC closed on Tuesday at $30.56.