UPDATE: Stifel Upgrades Kayne Anderson Energy Development On Adjusted NAV Discount

In a report published Thursday, Stifel analyst Selman Akyol upgraded the rating on Kayne Anderson Energy Development (NYSE: KED) from Hold to Buy, and named a $37.00 price target.

In the report, Stifel noted, “In mid-June KED was trading at $35.21 and approximately a 2.1% premium to its preliminary NAV of $34.49. Since then the fund price has declined approximately 8.1% to $32.37 while its Adjusted NAV has increased 6.8% to $36.85. As a result the fund is trading at 12.2% discount to its Adjusted NAV and offering investors an attractive yield of 6.4%.

"Accordingly we are raising our rating to Buy and establishing a conservative target price of $37.00 which offers investors a total return potential of approximately 20.7% comprised of 14.3% price appreciation and a current yield of 6.4%. Our target price is approximately 1.0x its NAV. We continue to believe that investors can be well served by funds which offer diversified portfolios and professional management. In addition, professional investors may have investment opportunities that individual investors may not be able to participate in. We also note that KED is suitable for IRAs, foundations, and tax exempt accounts as KED does not generate unrelated business taxable income (UBTI).”

Kayne Anderson Energy Development closed on Wednesday at $32.37.