RBC Capital analyst Brad Heffern initiated Earthstone Energy with an Outperform rating and a price target of $14, saying the 28% stock price underperformance since April relative to the Oil/Gas Exploration ETF XOP reflecting the less favorable Midland crude spreads is overdone. While the analyst notes that the company's 70% exposure to "wide Midland differentials and general basin crude congestion is real", it has been "more than fully priced in". Heffern also cites the company's strong Permian asset base that was acquired at a low entry cost and compelling valuation relative to its other Permian peers.