UPDATE: Bank of America Downgrades Northwest Natural Gas to Underperform on Valuation

Bank of America reduced its rating on Northwest Natural Gas

from Neutral to Underperform but maintained its price objective at $45 a share. Bank of America commented, "We are downgrading NWN to Underperform for the following reasons: 1) view valuation as stretched given NWN is currently trading at a ~11% 2014 P/E multiple premium over peers, 2) natural gas storage fundamentals remain muted due to sustained low natural gas prices, volatility, and summer-winter spreads, which have suppressed lease rates, 3) uncertainty around its ongoing Oregon (OR) general rate case, 4) longer term pipeline projects remain unclear, and 5) LDC sector trading at a ~19% premium versus historical averages, which cast further doubt on multiple expansion, in our view." Northwest Natural Gas closed at $47.29 on Friday.