UPDATE: Canaccord Genuity Starts Concho Resources (CXO) at Hold

(Updated - April 5, 2016 10:33 AM EDT)

Canaccord Genuity initiated coverage on Concho Resources (NYSE: CXO) with a Hold rating and a price target of $95. Analyst Sam Burwell thinks investors should wait for a better entry point.

"In our view, CXO possesses the best asset base in the Delaware Basin. Activity is weighted primarily towards the north, but a substantial position in the south intrigues us since results there have been steadily improving. The company has already invested in infrastructure to help gather its production more efficiently and improve netbacks. Additionally, its hedge book helps insulate the balance sheet, even into 2017. CXO will be in maintenance capex mode this year, but management has stated that it expects to grow "double-digits" in 2017 with the same rig count as '16 and remain cash flow neutral. While somewhat skeptical of this claim, we do believe CXO could easily grow 10% with a modest outspend and is well positioned to weather the current down-cycle. We are constructive longer-term, but would wait for a better entry point as the shares are trading within 8% of our NAV," said Burwell.

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 $97.90 yesterday.

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