Concho Resources (CXO) Downgraded to Hold at Zacks Investment Research

Zacks Investment Research downgraded shares of Concho Resources (NYSE:CXO) from a buy rating to a hold rating in a report published on Wednesday.

According to Zacks, “Concho Resources' 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 multiyear drilling inventory. With the $9.5 billion RSP Permian acquisition, the company has been able to further bolster its scale and leadership position in the region. Moreover, the company decided to initiate a regular quarterly dividend payment of 12.5 cents, which will commence from the first quarter of 2019. Despite all the above-mentioned positives, service cost inflation and lack of geographical diversification keep us on the sidelines. Thus, Concho Resources is expected to have limited upside from current levels and warrants a cautious stance.”

A number of other brokerages have also recently commented on CXO. Jefferies Financial Group set a $203.00 price target on Concho Resources and gave the stock a buy rating in a research report on Friday, October 5th. TheStreet upgraded Concho Resources from a c+ rating to a b rating in a research report on Friday, September 28th. Piper Jaffray Companies set a $193.00 price objective on Concho Resources and gave the company a buy rating in a research note on Sunday, September 30th. Morgan Stanley raised their price objective on Concho Resources from $155.00 to $163.00 and gave the company a hold rating in a research note on Wednesday, September 26th. Finally, SunTrust Banks raised Concho Resources from a hold rating to a buy rating and raised their price objective for the company from $155.00 to $170.00 in a research note on Monday, September 24th. Eight investment analysts have rated the stock with a hold rating and nineteen have given a buy rating to the company. Concho Resources presently has a consensus rating of Buy and an average price target of $181.83.

Shares of NYSE CXO opened at $130.34 on Wednesday. The company has a current ratio of 0.55, a quick ratio of 0.53 and a debt-to-equity ratio of 0.24. Concho Resources has a 52 week low of $123.63 and a 52 week high of $163.11. The firm has a market capitalization of $26.10 billion, a P/E ratio of 30.17, a P/E/G ratio of 0.91 and a beta of 1.00.

Concho Resources (NYSE:CXO) last issued its quarterly earnings results on Tuesday, October 30th. The oil and natural gas company reported $1.42 EPS for the quarter, topping the Zacks’ consensus estimate of $1.15 by $0.27. Concho Resources had a return on equity of 6.13% and a net margin of 26.92%. The company had revenue of $1.19 billion for the quarter, compared to analysts’ expectations of $1.10 billion. During the same quarter last year, the business earned $0.45 earnings per share. Concho Resources’s revenue was up 90.1% on a year-over-year basis. As a group, equities analysts anticipate that Concho Resources will post 4.97 EPS for the current year.

In other news, SVP Lee Price Moncrief sold 4,000 shares of Concho Resources stock in a transaction dated Wednesday, September 12th. The stock was sold at an average price of $139.86, for a total transaction of $559,440.00. Following the sale, the senior vice president now directly owns 16,193 shares of the company’s stock, valued at $2,264,752.98. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Company insiders own 1.10% of the company’s stock.

Several hedge funds have recently made changes to their positions in CXO. Vanguard Group Inc. boosted its stake in shares of Concho Resources by 34.6% during the third quarter. Vanguard Group Inc. now owns 20,946,532 shares of the oil and natural gas company’s stock valued at $3,199,583,000 after purchasing an additional 5,380,400 shares in the last quarter. Capital International Investors boosted its stake in shares of Concho Resources by 6,733.1% during the third quarter. Capital International Investors now owns 5,405,015 shares of the oil and natural gas company’s stock valued at $825,616,000 after purchasing an additional 5,325,915 shares in the last quarter. Capital World Investors boosted its stake in shares of Concho Resources by 18.6% during the third quarter. Capital World Investors now owns 21,979,324 shares of the oil and natural gas company’s stock valued at $3,357,342,000 after purchasing an additional 3,450,629 shares in the last quarter. BlackRock Inc. boosted its stake in shares of Concho Resources by 33.2% during the third quarter. BlackRock Inc. now owns 13,286,147 shares of the oil and natural gas company’s stock valued at $2,029,458,000 after purchasing an additional 3,315,173 shares in the last quarter. Finally, Capital Research Global Investors boosted its stake in shares of Concho Resources by 8.2% during the third quarter. Capital Research Global Investors now owns 18,785,086 shares of the oil and natural gas company’s stock valued at $2,869,422,000 after purchasing an additional 1,416,319 shares in the last quarter. 84.60% of the stock is currently owned by hedge funds and other institutional investors.

About Concho Resources

Concho Resources Inc, an independent oil and natural gas company, engages in the acquisition, development, and exploration of oil and natural gas properties in the United States. The company's principal operating areas are located in the Permian Basin of southeast New Mexico and west Texas. As of December 31, 2017, its total estimated proved reserves were 840 million barrels of oil equivalent.

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