UPDATE: Morgan Stanley Reiterates Equal-Weight Rating, Raises PT on Western Gas Partners LP on Marcellus Acquisitions

In a report published Friday, Morgan Stanley reiterated its Equal-Weight rating on Western Gas Partners LP (NYSE: WES), and raised its price target from $54.00 to $58.00.Morgan Stanley noted, “WES's Marcellus acquisitions from APC and CHK (7.6x and 9.7x 2013 EV/EBITDA respectively) continues its track record of visible acquisition growth and provides entry into Appalachia. While we see several more years of strong growth, we expect coverage to tighten in 2013+ (1.12x in 4Q). However, we still look for distribution growth at WES of 16.3% in 2013 and 16.2% in 2014, translating into distribution growth at WGP of 36.4% (4Q/4Q) and 33.3%, respectively. Given a strong growth outlook and relatively commodity-agnostic business model, WGP/WES are up ~55% /~19% respectively (vs. the group at ~12%) since WGP's IPO. While we believe a premium valuation (WGP and WES trading at 2013e P/DCF of 2.0%/43.0x and 3.8%/22.5x) is warranted, a lot is being priced into current valuation.”Western Gas Partners LP closed on Thursday at $54.84.