UPDATE: Goldman Sachs Upgrades Concho Resources to Buy, Reduces PT to $111

Goldman Sachs upgraded Concho Resources Inc.

from Neutral to Buy, but reduced the 6-month price target to $111 from $112. Goldman Sachs noted, "CXO currently trades at 6.4x/5.3x 2013E/14E EV/EBITDA, vs. 5.1x/4.7x average for peers. In our view, the premium is justified given CXO's superior oil growth/returns vs. peers and strong Delaware Basin results which raise confidence in CXO's resource life. We highlight that on 2016 estimates, valuation is at par with peers. We see 38% upside to our $111 DCF-/multiplesbased 6-month target price, lowered from $112 on lower EBITDA (we update 2012E -14E EPS after 3Q results on changes to production/costs/prices)." Concho Resources closed at $80.40 on Thursday.