UPDATE: Credit Suisse Upgrades Denbury Resources to Outperform on Possible Major Strategy Shift

In a report published Wednesday, Credit Suisse analyst Arun Jayaram upgraded the rating on Denbury Resources (NYSE: DNR) from Neutral to Outperform, and raised the price target from $20.00 to $24.00.

In the report, Credit Suisse noted, “DNR is contemplating a major strategy shift from a growth focus to a balanced growth and income model, with a meaningful dividend component through an upstream MLP structure. In our view, this would be a seminal event for the stock. We believe such a strategy shift would support a re-rating in DNR shares given the growing market appetite for yield (think MLPs, Refiners, and select Offshore Drillers). We see an asymmetric risk-reward profile with significant upside, as we do not believe this potential shift is discounted in DNR shares. We see limited downside given strong asset value support at current levels. Upgrade to Outperform (Neutral), with $24 (from $20) target price.”

Denbury Resources closed on Tuesday at $18.59.