Bank of America Merrill Lynch Reiterates Buy On Targa Resources Partners LP

Bank of America Merrill Lynch is reiterating its Buy rating and $39 price target on shares of Targa Resources Partners LP NGLS. In a note to clients, Bank of America Merrill Lynch writes, "We are updating our NGLS estimates to incorporate recent commodity pricing ahead of NGLS' 2Q11 earnings report. We are also adjusting our natural gas liquids (NGL) price assumptions to incorporate locational differentials in NGL pricing. Overall, we are lowering distributable cash flow (DCF) estimates by approximately 1% in 2011/12/13E, respectively. We remain constructive on NGLS as we see the partnership benefitting from solid NGL fundamentals and an attractive slate of organic growth projects. Despite our forecast for attractive growth at NGLS, we note our Adjusted EBITDA estimates are below consensus for 2Q11 and 2011/12/13E, which may be due to more conservative NGL price assumptions and the expectation that current NGLS hedges at below market NGL prices will somewhat limit gas processing margin upside near-term." Shares of NGLS closed at $35.39 yesterday.