Oasis Petroleum upgraded at BMO on more sustainable growth model

|About: Oasis Petroleum Inc. (OAS)|By:, SA News Editor

Oasis Petroleum (OAS -1.9%) is lower even after BMO Capital upgrades shares to Outperform from Market Perform with an $18 price target, citing improving fundamentals and attractive valuation following a recent decline.

BMO says OAS has become a pure-play Bakken producer that has improved returns in a manner that allows for “a more sustainable growth model,” and its debt-adjusted growth measures and cash-on-cash returns now appear more competitive.

The gap between capital spending and cash flow is expected to turn positive in 2018, and OAS seems to be posting among the highest recycle ratios in the group, the firm also says.