Goldman Sachs Upgrades Concho Resources (CXO) to Buy, Sees 38% Upside

November 9, 2012 7:56 AM EST
Get Alerts CXO Hot Sheet
Price: $135.42 --0%

Rating Summary:
    25 Buy, 13 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 9 | Down: 12 | New: 44
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Goldman Sachs upgraded Concho Resources (NYSE: CXO) from Neutral to Buy with a price target of $111.00 (from $112.00), suggesting 38% upside.

While Concho Resources has lagged Permian peers YTD, the firm believes this will likely reverse.

Goldman said CXO is a secular winner among E&Ps due to: (1) shale scale in the Permian Basin which we believe is in early innings of a technology-driven oil growth renaissance; and (2) low-cost asset base which along with strong expected oil growth yields superior returns versus peers.

"We see multiple expansion as investors gain comfort with rising resource in the Delaware Basin, coming uptick in oil weighting vs. 3Q, and CXO’s unique balance of near 20% oil growth while spending near cash flow," the analyst comments.

For an analyst ratings summary and ratings history on Concho Resources click here. For more ratings news on Concho Resources click here.

Shares of Concho Resources closed at $80.40 yesterday.

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