UPDATE: Canaccord Genuity Upgrades Concho Resources Following Reveal of Ambitious Growth Plan
In a report published Monday, Canaccord Genuity analyst Ipsit Mohanty upgraded the rating on Concho Resources (NYSE: CXO) from Hold to Buy, and raised the price target from $101.00 to $130.00.
In the report, Canaccord Genuity noted, “In what was a conference call meant to discuss the quarter, CXO took the opportunity to reveal its ambitious plan to double production by 2016 with a CAGR of 25%, starting with ~20% (mid-point) in '14 and ~30% in ‘15 & ‘16. CXO plans to lower its Debt/EBITDAX ratio to below 1.5x on the back of 66% oil-weighted, high margin production. This plan hinges on an accelerated drilling program of ~37/45/55 rigs in ‘14/15/16, respectively. We appreciate CXO's plan to advance NAV with a rich inventory of locations across the Permian, and its intention to provide near-term visibility of the plan by disclosing quarterly guidance going forward.”
Concho Resources closed on Friday at $110.20.
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