UPDATE: Citigroup Upgrades MDU Resources Group to Buy, Raises PT

In a report published Monday, Citigroup upgraded its rating on MDU Resources Group

from Neutral to Buy, and raised its price target from $22.00 to $29.00. Citigroup noted, “We believe MDU should break up via 1) a tax-free spin-off of the Construction Materials & Services business; and 2) an outright sale of E&P. We estimate a break-up value of ~$29p/s (see details in note). Shares of MDU have under-performed a basket of 21 peers (MDU's Proxy peers) by over 500bps YTD. We believe the integrated business model is no longer in the best interest of MDU shareholders. We are upgrading shares of MDU to Buy from Neutral with a $29 target price. We are removing MDU as Least Preferred. Our consolidated ‘13 & ‘14 EPS estimates move higher due to lower assumed Bakken differentials.” MDU Resources Group closed on Friday at $20.76.