UPDATE: Bank of America Merrill Lynch Initiates Coverage on Linn Co LLC with Neutral Rating, $40 PT

In a report published Wednesday, Bank of America Merrill Lynch initiated coverage on Linn Co LLC

with a Neutral rating and $40.00 price target. BofA Merrill Lynch noted, “On Oct 11th, LINN Energy (LINE) announced the IPO of LinnCo (LNCO), a Nasdaq listed wholly owned subsidiary. LNCO was priced at $36.50, with an initiation offering of ~34.76mm shares raising $1.27bn. Following the quiet period post IPO, we initiate LNCO at $40 with a Neutral rating. This is in conjunction with our reinstatement of LINE (Neutral, PO $41). Note that our price objective for LNCO is entirely based on our assessed fair value for LINE net of the income tax liability we anticipate at the corporate level, projected by management to be between 2% – 5% of cash distributions. LNCO's entire purpose is to own LINE units on a 1 for 1 basis and pass through LINE distributions in the form of dividends, net of tax.” Linn Co LLC closed on Tuesday at $37.07.