Shares of Permian Resources Corp (NYSE:PR) were climbing in early trading on Wednesday.

The company's increased Delaware footprint and strong M&A track record should support continued organic and inorganic growth, according to BMO Capital Markets.

The Permian Resources Analyst: Phillip Jungwirth upgraded the rating for Permian Resources from Market Perform to Outperform, while keeping the price target unchanged at $21.

The Permian Resources Thesis: The company has a large-scale and low-cost footprint in Delaware, Jungwirth said in the upgrade note.

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"Permian Resources has built a sizable position in the Delaware Basin through organic growth, large scale M&A, bolt-ons, and grassroots leasing," the analyst wrote.

The scale of more than 400,000 net acres and solid execution have given Permian Resources "a top-tier cost structure and strong operational performance," he added.

"Management estimates 15+ years of inventory, which supports optionality on production growth of 0–10% depending on macro conditions," Jungwirth stated.

The Earthstone deal has generated impressive synergy outperformance and additional operating cost improvements are possible, he further said.

PR Price Action: Shares of Permian Resources had risen by 1.93% to $16.64 at the time of publication on Wednesday.

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