UBS analyst Shneur Gershuni reiterated a Buy rating and bumped its price target on Williams Partners LP (NYSE: WPZ) to $39.00 (from $37.00) with 2016 EBITDA Guidance Inline, DPU Flat through ‘17.

Gershuni commented, "WPZ announced an expectation to maintain the distribution at $0.85/qtr above UBSe of $0.765/qtr deciding to pursue consolidated deleveraging through a dividend cut at WMB. WMB intends to support WPZ through it heavy capex phase via agreeing to acquire $250mm of WPZ equity in 3Q16, and WMB plans to reinvest $250MM in 4Q16 and another $1.2B in ’17 via the DRIP. This combined with over $1B in pending assets sales should be able to fund WPZ’s ‘16-’18 capital program while achieving leverage targets. WPZ announced ’16 EBITDA outlook of $4.3B in-line with UBSe, ’16 growth capex of $1.9B, vs prior $2.1B (vs. UBSe of $1.8B) and ’17 capex of $3.1B. We expect the higher distribution outlook will be viewed favorably by investors."

The firm is adjusting ests to reflect the 2Q16 results and expected asset sale. They are updating our EBITDA ests. for 2016/2017/2018 to $4,336MM/$4,752MM/$4,922MM from $4,305MM/$4,780MM/$4,879MM.

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Shares of Williams Partners LP closed at $34.68 yesterday.