Investment bank Cannacord Genuity recently upgraded oil and gas company Trinidad Drilling (TDG:TSX) to a BUY rating and maintained its target share price of C$11.25.

Cannacord previously downgraded Trinidad to Hold following the release of the company's Q1 results. These results showed that Q1 relative cash flow growth was meager due to various factors including significant debt, utilization rates of existing capacity that were already high and a 2012 P/E ratio that was 23 percent higher than its peers.

The stock's rating is being upgraded to BUY from Hold as the P/E ratio premium had fallen to 11 percent, the company has maintained its high utilization rates and the new prospects for growth are an improvement over the old ones. Cannacord was also impressed after attending Trinidad's analyst day, which illustrated the favorable customer relationships, technology and manufacturing capabilities for the oil and gas company.

Trinidad Drilling Ltd. opened at C$6.70 on September 27 and hit a 52-week high/low of C$11.21 and C$4.86, respectively.