Ahead Of The Bell: Bill Barrett Upgraded To "Buy"

NEW YORK (AP) — Bill Barrett Corp. shares are positioned to grow, said an analyst Thursday as he upgraded the natural gas and oil producer's stock.

SunTrust Robinson Humphrey's John Gerdes raised his rating to "Buy" from "Neutral," citing its "unjustified" 40 percent discount to sector peers.

Gerdes also raised his price target for the stock to $46, up from $39. The shares closed at $35.56 on Wednesday and added 4 cents in premarket trading.

Bill Barrett is set to grow, given its array of gas development opportunities in the Rocky Mountains, diverse properties and highly competitive technical understanding of Rocky Mountain gas-producing formations, Gerdes said.

Adding to the good news, Gerdes noted, is the company's emerging resource potential in the Paradox Basin Gothic Shale. He added that the company's November earnings call could be a positive catalyst if it successfully improves well productivity and addresses salt intrusion issues at these properties.

Gerdes cut his third-quarter estimate for Bill Barrett to 41 cents per share, down from an earlier prediction of 43 cents per share. Analysts polled by Thomson Reuters expect third-quarter earnings of 35 cents per share.