Back to top

Image: Bigstock

Concho Resources Inc.

Read MoreHide Full Article

We are upgrading our investment thesis on Concho Resources to a 'Buy. CXO shares have gained +8% over the last month, handily outperforming the Zacks Oil & Gas U.S. Exploration & Production industry, which rose just +4% over the same time period. The company's core operations are focused in the prolific Permian basin, providing this large-cap E&P with an enviable acreage of low-risk top-tier assets and a multi-year drilling inventory. While Concho's track record of production growth remains strong, it has been achieved at a competitive cost structure. CXO also maintains a robust balance sheet, while following a prudent investment approach. Consequently, we think CXO offers substantial upside potential from the current price levels and view it as an attractive investment.