Canaccord Genuity Upgrades Cimarex Energy to “Buy” (XEC)

Oil and natural gas producer Cimarex Energy Co. (XEC) on Tuesday caught a big upgrade from analysts at Canaccord Genuity.

The firm said it boosted its rating on XEC from “Hold” to “Buy” and maintained its $84 price target. That target suggests a 29% upside to the stock’s Monday closing price of $65.24.

A Canaccord Genuity analyst commented, “We are raising XEC to BUY and maintaining our target at $84 as a stronger shift to oil offsets higher operating expense. XEC overreacted to the upside following Q4 results, in our view. Since then, the stock has declined over 20% while Permian peers have fallen only ~10%. We now see ~10% greater upside versus Permian peers as Cimarex offers a similar CFPS growth outlook (’12-’14E) though trades at a ~20% discount (’12E EBITDA).”

Cimarex shares were mostly flat in premarket trading Tuesday.

The Bottom Line
Shares of Cimarex Energy (XEC) have a .74% dividend yield, based on last night’s closing stock price of $65.24. The stock has technical support in the $58-$60 price area. If the shares can firm up, we see overhead resistance around the $70-$71 price levels.

Cimarex Energy Co. (XEC) is not recommended at this time, holding a DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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