UPDATE: Bank of America Upgrades Athlon Energy to Buy, Raises PT on Reshuffling the Midland Deck

In a report published Tuesday, Bank of America analyst Jason Smith upgraded the rating on

from Neutral to Buy, and raised the price target from $54.00 to $60.00. In the report, Bank of America noted, “Since its initial public offering in the summer of 2013, Athlon has handily beaten street production expectations while tacking on acreage in the core of the Midland Basin (Midland and Martin Counties). We see numerous catalysts ahead as Athlon continues to ramp its horizontal drilling program and believe that significant upside to type curves, likely updated with YE reserves, could drive street production and NAV estimates higher. While Howard County does not make up as material a part of the company's acreage as it did 12 months ago, initial results out of the area are encouraging, surpassing Athlon's expectations by a broad margin, while the development of new zones such as the Spraberry and downspacing could increase Athlon's total inventory count. We see Athlon's total production CAGR through 2016 at 65% - and on a debt adjusted basis, 49%, which screens towards the high end of the Midland Basin peer group.” Athlon Energy closed on Monday at $45.18.