Wunderlich Securities Expects Distribution Cuts in Next Quarter for LRR Energy LP

In a report published Thursday, Wunderlich Securities analyst Abhishek Sinha reiterated a Hold rating and $8.00 price target on LRR Energy LP LRE. In the report, Wunderlich Securities noted, "LRR Energy (LRE) reported 4Q Adj. EBITDA of $21.9mm, marginally beating our estimate and consensus of $21mm. Volumes and realizations came in line with our expectations. However, at this point modest results are immaterial in our view. LRE is experiencing tight liquidity, which would be further limited in May when its borrowing base gets re-determined, to the extent that it could fall below LRE's current outstanding borrowings. The company is in great need of liquidity and is aggressively looking for public and private opportunities to raise capital that would help pay down its debt and strengthen its liquidity. We believe a deep distribution cut is inevitable and have factored in a 40% cut in our model going forward. Our rating on LRE shares remains Hold." LRR Energy LP closed on Wednesday at $8.09.