Global Hunter Securities Starts Enterprise GP Holdings L.P. (EPE) at Neutral

Global Hunter Securities initiates coverage on Enterprise GP Holdings L.P. (NYSE: EPE) with a Neutral rating and a price target of $15.00.

Analyst Andrew Smith said, "EPE has built attractive positions in the Eagle Ford Shale, Permian Basin, Uinta Basin and Haynesville Shale at low entry costs and has proven to be among the most efficient operators in each play. While the Eagle Ford has driven oil production growth to date, the Permian accounts for the majority of EPE's inventory."

"We believe the biggest opportunity for EPE to create value is in the Permian, where the company is still in the early innings of development. Our current NAV-based price target of $15 could reach ~$27 if returns are improved and drilling is accelerated in the Permian, EURs are increased and downspacing is successful in the Eagle Ford and an asset sale is announced that would reduce leverage (we project net debt/2014 EBITDAX of 3.1x at 12/31/14). In a bearish scenario with Permian returns slightly diminished, well spacing and rig counts remaining at current levels and no asset sales, our NAV could reach ~$12 per share. While there are avenues for upside to our base case, our enthusiasm is curbed after comparing EPE to some of its diversified mid-cap peers (see comp table on page 5). Therefore, we are initiating coverage of EP Energy with a Neutral rating and $15 NAV-based price target," he added.

For an analyst ratings summary and ratings history on Enterprise GP Holdings L.P. click here. For more ratings news on Enterprise GP Holdings L.P. click here.

Shares of Enterprise GP Holdings L.P. closed at $14.60 yesterday.

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