UPDATE: Wunderlich Securities Upgrades Legacy Reserves LP to Buy, Reiterates $31 PT as Valuation Now Looks Attractive

In a report published Monday, Wunderlich Securities analyst Abhishek Sinha upgraded the rating on

from Hold to Buy, and reiterated the $31.00 price target. In the report, Wunderlich Securities noted, “Legacy Reserves (LGCY) announced a secondary offering of 11.5mm units including an underwriter's purchase option of 1.5mm units. The issuance that was priced at $27.38 could generate net proceeds of over $270mm and rebalance its capital structure. We are upgrading the stock to Buy as we see the recent dip in prices as a solid buying opportunity. In our opinion, valuation looks attractive as our $31 price target now offers a 22% total return. Post the equity offering, LGCY's liquidity has improved and with over $900mm available, the company has ample dry powder to make a large scale acquisition that would further drive production and distributions growth and compress the multiple.” Legacy Reserves LP closed on Friday at $27.40.