UPDATE: Wunderlich Securities Downgrades QR Energy LP to Hold, Lowers PT on Multiple Risk Factors

In a report published Thursday, Wunderlich Securities analyst Abhishek Sinha downgraded the rating on

from Buy to Hold, and lowered the price target from $20.00 to $18.00. In the report, Wunderlich Securities noted, “QR Energy, LP (QRE) announced today its plans to pursue organic growth and raised its 2014 capex budget by 80% from $101mm to $182mm. The efforts would most likely pay off as QRE would be developing proven reserves; however, the production impact would be visible only next year. The tight balance sheet and a modest coverage ratio in the interim would keep the stock range-bound, in our view. Because of its high cost of capital, executing a material accretive transaction would also be an uphill task. Looking at the relative valuation, high leverage, and lack of near-term catalysts, we think at this time other stocks in our coverage universe offer better risk-reward propositions. Accordingly, we are downgrading the stock to Hold with a target of $18.” QR Energy LP closed on Wednesday at $17.63.