Will This Price Target Upgrade Have A Positive Impact On Concho Resources (CXO) Today?

NEW YORK (TheStreet) -- Concho Resources Inc's. (CXO) price target was upped to $153 from $140 at Barclays (BCS) on Friday as the firm said the independent oil and natural gas company is showing strong operational results and efficiency gains.

Barclay's has an "overweight" rating and a "positive" industry view on the stock.

Shares of Concho Resources are up 0.16% to $132.46 at the start of trade on Friday.

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Separately, TheStreet Ratings team rates CONCHO RESOURCES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CONCHO RESOURCES INC (CXO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, good cash flow from operations, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 40.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for CONCHO RESOURCES INC is currently very high, coming in at 80.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.81% is above that of the industry average.
  • Net operating cash flow has significantly increased by 116.67% to $475.98 million when compared to the same quarter last year. In addition, CONCHO RESOURCES INC has also vastly surpassed the industry average cash flow growth rate of 18.91%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 203.4% when compared to the same quarter one year prior, rising from $30.09 million to $91.31 million.
  • Powered by its strong earnings growth of 411.76% and other important driving factors, this stock has surged by 61.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • You can view the full analysis from the report here: CXO Ratings Report
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