While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Cimarex Energy Co (NYSE:XEC) gained slightly on Tuesday after Global Hunter Securities upgraded the oil and gas explorer from neutral to buy.

So what: Along with the upgrade, analyst Mike Kelly boosted his price target to $175 (from $116), representing about 25% worth of upside to yesterday's close. So while contrarian traders might be turned off by Cimarex's price strength over the past month, Kelly's call could reflect a sense on Wall Street that its production growth prospects still aren't fully baked into the valuation.

Now what: According to Global Hunter, Cimarex's risk/reward trade-off remains particularly attractive. "We're confident that XEC's recent boost to its underlying growth rate isn't a fluke," said Kelly. "In fact, we now expect further acceleration in 2015 (+24% growth in 2015 vs. +20% in 2014). Recent notable improvements in individual well recoveries across the company's Permian & Mid-continent acreage positions stemming from revised completion techniques (XEC is now implementing larger fracs with more stages/higher fluid & sand volumes) are also a big driver of our increased NAV value." When you couple that upbeat outlook with Cimarex's industry-topping margins, it's tough to disagree with Global Hunter's bullishness.

 

Brian Pacampara has no position in any stocks mentioned. The Motley Fool owns shares of Cimarex Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.