Whiting USA Trust II Upgraded To Outperform At Raymond James

In a report published Friday, Raymond James analyst Kevin Smith upgraded the rating on

from Underperform to Outperform, while setting a new price target of $4.50, following the recent pullback in the company's shares. Shares of Whiting USA Trust II have plunged around 45 percent year to date. Most of this downturn has taken place within the last month, during which the shares plummeted 37 percent. Analyst Kevin Smith considers the sell-off as "overdone," saying that the market price has "moved too far into bearish territory." In the report Raymond James noted, "We estimate that 1Q15's distribution was the bottom and distributions should steadily increase throughout the year…Whiting's USA Trust II's production is heavily weighted towards oil (77%), and the trust's last remaining hedges rolled off in 1Q15. Thus, the 1Q15 distribution bore the full brunt of the decline in oil prices, falling from $0.33 in 4Q14 to $0.01/unit in 1Q15…Understandably, this dramatic decline in the distribution, while well telegraphed, resulted in a disruptive stock performance." "WHZ currently trades at a 36% discount to our NAV, representing a yield to maturity of 24.5%, well above the peer group average. Our valuation is supported by a rebound in oil prices and falling costs, which should help to stabilize the distribution in 2016/17," Smith added.