UPDATE: First Energy Capital Upgrades EnCana Corporation to Market Perform; Shares Undervalued

First Energy Capital raised its rating on EnCana Corporation ECA from Underperform to Market Perform and increased its price target from $20 to $21 a share. First Energy Capital said, "A thorough review of Encana's Net Asset Value, leads us to reach the same conclusions as we did with our previous NAV model: On 2P reserves alone, the stock looks very overvalued (2P NAV 10% Atax US$8.43/share at the strip, or US$14.08/share at our price deck). However the stock is materially below our estimate of its Unrisked NAV (~US$25/share at the strip, or US$35/share at our price deck). Choosing how to “risk” the value of the unbooked drilling inventory is admittedly very subjective, but we arrive at a “risked” or “base” NAV of US$21.00/share at our deck, or US$13.23/share at the strip." Encana Corporation closed at $19.68 on Friday.