This company is one of the large independents and has spent the past five years divesting assets. Although it is cash rich, it has somewhat dampened earnings and growth expectations all year long. With oil still looking for a bottom, and the market watching events in the Middle East, many analysts may feel more comfortable with the stock.
Merrill Lynch feels Conoco can accelerate growth from reloaded portfolio depth in the Bakken and Eagle Ford shale plays with visibility on future growth from a newly disclosed sizable position in the Permian Basin. Analysts are cautious but positive on the company’s earnings report, due this week. Solid cuts in unnecessary spending and the possibility of increased sales of non-core assets remain ongoing positives.
The company’s outlook for 2015 now calls for production to rise to the upper end of its growth target of 2% to 3% from continuing operations, excluding Libyan production. For the third quarter Conoco forecasts production of 1.44 to 1.51 million barrels of oil equivalent per day. Cost and expense control is forecast to add $900 million to net cash flow.
Ahead of the earnings report a few analysts weighed in on ConocoPhillips:
- Merrill Lynch has a Buy rating and raised its price target to $77 from $74.
- Barclays reiterated a Buy rating with a $65 price target.
- Cowen has a Market Perform rating and a $57 price target.
So far in 2015, ConocoPhillips has underperformed the market and shares are down 21.4% year to date, while over the past 52-weeks shares are down 21.1%.
Shares of ConocoPhillips were last trading at $53.09, with a consensus analyst price target of $62.23 and a 52-week trading range of $41.10 to $74.68.
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