This was posted by "Passandshoot" on the Investors Village" MLP message board. Thanks to Passandshoot!!!

PVR/PVG Research Summary
[source: U]
[Side Note: on CC today, management emphatically stated that the distributions would NOT be cut in 2010 even with current low coal pricing]

Solid Results in Tough Times

􀂄 Better than expected volumes drive 3Q09 beat

PVR realized 3Q09 EPU of $0.30, above both our $0.26 estimate and the Street’s consensus estimate of $0.28. Results surpassed our estimates due to lower royalty costs and stronger natgas midstream margins and volumes, which were partly offset by lower coal volumes than anticipated. PVG realized 3Q09 EPU of $0.29,above both our $0.23 estimate and the Street’s consensus estimate of $0.25.

􀂄 Remaining bullish on the names

Following our upgrade of PVG and Buy reiteration on PVR in mid-October, we remain bullish on the names. While we acknowledge the fundamental challenges on both the natgas midstream and coal royalty fronts, we believe PVR and PVG valuations have been depressed by PVA’s (the parent) recent public offering of a portion of its PVG units, as 1) PVG has suffered from an increase in supply of units; and 2) PVR has suffered from investors shorting PVR and going long PVG to capitalize on the inverted yield spread. We again reiterate our Buys.

􀂄 Adjusting 2009 estimates

Accounting for the 3Q09 beat and slightly stronger expected coal and gas volumes in 4Q09, we are increasing our 2009 PVR/PVG EPU estimates to $1.10/$1.15, from $1.05/$1.05, respectively. We are maintaining our $1.31/$0.81 2010 EPU

estimates for PVR/PVG, but would note the risk to our 2010 estimates may be to the upside.

􀂄 Valuation: Reiterate Buy recommendations

We are maintaining our DDM-derived price targets of $19/$17 for PVR/PVG, respectively, and reiterate our Buy recommendations.


-- Sooner