UPDATE: KLR Group Upgrades Concho Resources

In a note released Tuesday morning, KLR Group analyst John Gerdes upgraded shares of of Concho Resource (NYSE: CXO) from Accumulate to Buy and raised the price target from $176 to $185.

Gerdes noted that the upgrade comes on the back of a five to 10 percent increase in 2015 forward capital spending. Further, his capital plan assumes a development program in the Permain Basin of approximately 40 rigs.

For 2014, Gerdes is predicting ~22 percent growth in production which is at the mid point of guidance. However, in 2016 his production estimate is five percent lower than Concho's goal.