UPDATE: Oppenheimer Initiates Coverage on Western Gas Partners LP, Attractive Return Expected

In a report published Wednesday, Oppenheimer analyst Bernard Colson initiated coverage on Western Gas Partners LP (NYSE: WGP) with an Outperform rating and $48.00 price target.

In the report, Oppenheimer noted, “We initiate coverage of WGP with an Outperform rating and $48 PT. WGP derives 100% of its cash flow from WES through its ownership of both WES common units and WES's incentive distribution rights. WES's 15% 4Q13E distribution growth (driven by its multi-pronged growth strategy) is expected to translate into 36% distribution growth at WGP. The majority of WGP is still owned by APC, creating a tight link (and aligned interests) between WES, WGP and APC. We believe despite WGP's low current yield that total return will be attractive over the next twelve months.”

Western Gas Equity Partners LP closed on Tuesday at $38.56.