UPDATE: Citigroup Upgrades Kinder Morgan to Buy on Compelling Valuation

Citigroup raised its rating on Kinder Morgan

from Neutral to Buy and increased its price target from $32 to $39. Citigroup noted, "KMI is now one of the largest and most diversified midstream energy companies in North America, which we believe makes the company an attractive way to play the infrastructure side of upstream supply growth in the U.S. and Canada. We believe management will be able to successfully drive improved growth to shareholders and ultimately de-lever the company following its $38 billion acquisition of El Paso. The primary drivers that support our improved growth outlook include: management's recent push to align the company closer to producers in low cost areas of development, the realization of $400 million in synergies through a combination of reduced overhead costs and maintenance capital spending, and new large scale expansion projects that we believe are likely to emerge." Kinder Morgan closed at $33.34 on Thursday.