UPDATE: Morgan Stanley Initiates Coverage on EP Energy Corp. with Equal-Weight Rating, $22 PT on Position in Permian Basin Wolfcamp

In a report published Friday, Morgan Stanley analyst Evan Calio initiated coverage on

with an Equal-Weight rating and $22.00 price target. In the report, Morgan Stanley noted, “Initiating at Equal-weight; fair credit for deep Wolfcamp resource. EPE trades at a 23% discount to peers on 2015e EBITDA despite controlling a Wolfcamp position that can support 5-10 years of liquids production growth. We think the discount is fair given its lower Wolfcamp returns and the more moderate growth potential of EPE's assets vs. those of Permian Basin peers. Our $22 PT equates to 5.5x 2015e EBITDA, above the current 5.1x multiple but still below liquids-weighted peers at 6.3x.” EP Energy Corp. closed on Thursday at $18.53.