UBS (NYSE:UBS) and Canaccord Genuity both say they're maintaining their "Buy" rating on Concho Resources (NYSE:CXO).
Canaccord said, "We are reiterating our rating with greater conviction based on the closure of the Marbob deal, the announced divestiture plan and the announced Bone Spring acreage update. We continue to be impressed by the company’s management team and its laser focus on high return oily plays in the Permian Basin. With these announcements, we believe the company is well positioned to outperform based on its stronger asset base and increasing investor interest in the Bone Spring trend."
They have a price target of $74 on Concho.
"CXO will pay roughly $1.3bn (vs. $1.65bn prior) for Marbob after $400m in
pref rights were exercised on Yeso, NM shelf assets (which may be
reversed)...Importantly, CXO disclosed that it acquired 150k net acres in the Bone Spring as part of the deal, vs. 100k previously thought, which is
incremental to our NAV by $3/share...We are lowering our 2011/2012 estimates to $9.93/$11.01 from $10.25/$11.80 owing to lower incremental volumes from the acquisition," said UBS.
They lifted Concho's price target from $70 to $76.
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