Why SunTrust Upgraded Whiting

In a report published Tuesday, SunTrust Robinson Humphrey analysts upgraded the rating on

from Neutral to Buy, while raising the price target from $34 to $44. "Following recent conversations with Whiting, we forecast upcoming capital efficiency as the company's technical innovations and cost controls take notice," the analysts said. The company is likely to report robust results for 1Q, as well as a better-than-expected pick-up in production and cash flow. In the report SunTrust Robinson Humphrey noted, "Our improved outlook is aided by continued cost efficiencies as we now incorporate a ~10% uptick in capital productivity which is below implied YE15 cost declines of ~20% in the Bakken and ~10% in the DJ. We also forecast potential record setting well results as Whiting appears to have the best technical team in the play." The CFPS estimates for 2015 and 2016 have been raised from $5.76 and $6.34 and from $7.25 to $8.33, respectively, to reflect higher NYMEX oil prices and gas prices. "While takeout speculation and recent debt/equity offerings have clearly dominated recent stock performance, we believe the focus/conversations are turning back to the asset base that should see improving results during Thursday's conference call," the analysts added.