El Paso Corporation (EP)

[NovoMira]

El Paso Keeps Rising

El Paso Shares Keep Rising As Citigroup Analyst Raises Target, Estimates on Growth Potential

NEW YORK (AP) -- Investors continued to buy up El Paso Corp. shares Tuesday as a second analyst cited a positive outlook for the natural-gas exploration and transmission company's growth prospects.

Shares of the Houston-based company rose 63 cents, or 3.7 percent, to $17.88 in morning trading. Its stock gained 26 cents Monday to close at $17.25.

Citigroup analyst Faisel Khan lifted his price target to $23 from $18.50 and raised estimates for El Paso in a note Monday evening. Khan expects $2.5 billion in new projects for El Paso, which operates the country's largest pipeline network, over the long term. He also cited greater expectations for El Paso's Pinuana oil discovery in Brazil and the completion of its master limited partnership's initial public offering last year.

While El Paso's shares have risen more than 10 percent since hitting recent lows in late November, Khan said those catalysts will enable further appreciation ahead.

The recent increase was "largely driven by a 'rising tide' commodity price increase rather than an actual fundamental understanding of the El Paso story," Khan wrote. "This gives us conviction that the stock continues to be undervalued at current levels."

Also on Monday, Wachovia Capital Markets analyst Samuel Brothwell upgraded El Paso shares to "Outperform" from "Market Perform." He also cited "multiple expansion opportunities" in 2008.