UPDATE: Citigroup Upgrades Rosetta Resources to Buy Following Solid Q3 and 2013 Guidance

Citigroup raised its rating on Rosetta Resources

from Neutral to Buy, both High Risk, and increased its price target from $50 to $60. Citigroup commented, "Based on Q3 results, new guidance, hedges and an increase in our 2013/2014 oil production ests, 2013 EPS/CFPS rise to $4.24/$10.89 from $3.45/$9.23, and 2014 to $6.24/$14.88 from $5.56/$13.31. Thus, we are raising our PT from $50 to $60, which is based on the stock achieving a 2013 EV/DACF multiple of 5.8x (on normalized $90/Bbl and $4.50/MMBtu), below our E&P coverage group average of 6.2x, and we are upgrading shares to Buy from Neutral. Given ROSE's top tier production growth outlook, and best in class returns, we think the valuation is conservative." Rosetta Resources closed at $47.90 on Wednesday.