QEP Resources +2% on plans to separate midstream business

|About: QEP Resources, Inc. (QEP)|By:, SA News Editor

QEP Resources' (QEP +2.1%) announcement that it will pursue a separation of its midstream business and its interest in QEP Midstream Partners (QEPM +2%) did not specify how it would be achieved, but Sterne Agee thinks it will happen through an IPO or an outright sale of the field services company and the interest in QEPM.

There's a lot of room for growth in the midstream limited partnership, where incentive distribution rights kick in after a distribution of $0.2875 to limited partners, Sterne says; in Q3, the partnership distributed just $0.13.

The firm also raises its price target on QEP to $39 from $36, based on a sum-of-the-parts estimated value.