Wells Fargo Downgrades Penn Virginia Resource Partners (PVR) to Market Perform

February 21, 2013 8:41 AM EST
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Price: $27.44 --0%

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Wells Fargo downgraded Penn Virginia Resource Partners (NYSE: PVR) from Outperform to Market Perform and lowers their valuation range to $23-25 from $27-29 per unit following disappointing quarterly results and a downward revision to 2013 guidance.

The firm lowered 2013 DCF/unit estimate to $2.37 from $2.97 to reflect more conservative margins across all three business segments.

The firm comments, "Given the revised EBITDA outlook and a $350-400MM organic capital budget for 2013, PVR's debt metrics are likely to remain elevated near-term. The partnership will likely need to obtain a waiver from its bank group to avoid a debt-covenant violation in Q1 2013 and is likely to issue equity to both delever and finance its growth capital budget, which could act as a headwind to price performance. Notably, we do view the current distribution as sustainable even given our revised forecast; however, distribution growth could be muted in 2013."

For an analyst ratings summary and ratings history on Penn Virginia Resource Partners click here. For more ratings news on Penn Virginia Resource Partners click here.

Shares of Penn Virginia Resource Partners closed at $23.00 yesterday.

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