Whitecap Resources Inc. (WCP.TO) was upgraded to Outperform from Market Perform at Raymond James on Tuesday.

Analyst Luke Davis maintained a price target of $13 on shares of the Calgary-based oil company following the announcement Monday that it will merge with Veren Inc. (VRN.TO) to create the seventh-largest oil and gas producer in Canada.

"In true blockbuster fashion, what has seemed like a logical transaction for a number of years has come to fruition," Davis said in a note to clients.

"In our view, the combined company will be positioned exceptionally well with Whitecap's best-in-class management team poised to improve operational performance and capture synergies across the value chain," the analyst said.

"While there may be some capitulation as the deal is digested, we think this ultimately positions the company among Canadian large cap peers, which we believe sets out a clear path to sustainable multiple expansion."

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)