UPDATE: Wunderlich Securities Downgrades EnLink Midstream LLC On Fully Valued GP

In a report published Thursday, Wunderlich Securities analyst Jeff Birnbaum downgraded the rating on EnLink Midstream LLC (NYSE: ENLC) from Buy to Hold, and lowered the price target from $51.00 to $38.00.

In the report, Wunderlich Securities noted, “We are transferring coverage of EnLink Midstream, LLC (ENLC) with a Hold rating and $38 target. ENLC is the general partner of EnLink Midstream LP (ENLK-$28.20, Buy). The GP product of Devon's (DVN-NR) acquisition of Crosstex, ENLC remains a hybrid--a GP with select assets in addition to its GP & LP interests in ENLK. Following the dropdown of its E2 assets, ENLC still splits ownership 50/50 with ENLK in EnLink Midstream Holdings (EMH)--Devon's legacy assets in the Barnett and Oklahoma. As ENLK grows, we expect ENLC to become a pure-play GP and we forecast a drop of ENLC's interest in EMH in 1Q16, although 2H15 is possible. As ENLK enters the high splits in 4Q, ENLC will benefit. We see steady 20%+ ENLC growth post-dropdown, but choppiness before then, and see units as fairly valued today.”

EnLink Midstream LLC closed on Wednesday at $33.98.