In a note Tuesday morning, Bank of America gave multiple reasons on why they believe Anadarko Petroleum Corporation APC may have a case for regaining their premium value against its peers. The analysts believe one issue that has been misinterpreted by the Street is the impact of oil on MLP interests.
With the partial sale of WGP for $550 million, Anadarko was able to free up additional liquidity. Due to this, Bank of America believes Anadarko has a stronger balance sheet from this deal, and therefore, cheaper. What hasn't changed in Bank of America's eyes, is the scale and asset quality that Anadarko has in its investment case vs. peers. With Anadarko, Bank of America sees a potential step up in 2016 for market to attain its former premium vs. the onshore E&P plays.
Bank of America maintained their Buy rating on Anadarko, while raising the price target from $85 to $95.
Shares ended Tuesday's session up 1.2 percent at $55.51 per share.
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