UPDATE: Canaccord Genuity Initiates Coverage on Bill Barrett Corporation with Buy Rating, $28 PT on Positive Outlook

In a report published Monday, Canaccord Genuity analyst Ipsit Mohanty initiated coverage on Bill Barrett Corporation BBG with a Buy rating and $28.00 price target. In the report, Canaccord Genuity noted, “In two years, Bill Barrett has transitioned from 92% gas-weighted to 24% oil-weighted by production (2013E). During this period, oil reserves grew at 87% (CAGR) and oil prod grew at 55% (CAGR) primarily due to the Uinta, but from here on we see oil continuing a double-digit growth trajectory led by Wattenberg. Further, potential divestiture of gas assets will complete the impressive gas-to-oil transition, and could leave the company with 40% oil-weighted production (2014E). While our base-case NAV is based on high-margin liquids growth from Niobrara B Bench, upside to NAV could be a result of 1) successful results from additional Niobrara benches & Codell; 2) successful testing of 40-acre downspacing and extended laterals in Wattenberg; 3) better performance and downspacing in the Uinta; and 4) execution of asset sales. In addition, the Powder River Basin (PRB) asset remains an attractive option value. Ahead of pending near-term catalysts, we initiate coverage of BBG with a BUY and $28 price target.” Bill Barrett Corporation closed on Friday at $21.10.