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On Friday, Barclays (LON:BARC) analyst Jeanine Wai adjusted the price target for ConocoPhillips (BVMF:COPH34) stock (NYSE:COP) to $135 from the previous target of $137, while maintaining an Overweight rating on the shares. According to InvestingPro data, analysts maintain a strong bullish consensus on COP, with price targets ranging from $114 to $165, while nine analysts have recently revised their earnings expectations upward. Wai highlighted ConocoPhillips as having one of the clearest free cash flow (FCF) growth narratives among the stocks covered by Barclays through the end of the decade. The company’s strong financial position is reflected in its EBITDA of $23.77 billion and impressive dividend track record, having maintained payments for 55 consecutive years. The analyst noted that this is expected to result in increased cash returns to shareholders, both in absolute terms and on a per-share basis, and that the stock is still attractively valued compared to its peers, currently trading at a P/E ratio of 12.83.
The commentary from Wai came after the company’s fourth-quarter 2024 conference call, where ConocoPhillips management provided a five-year outlook. According to the analyst, the call revealed a more capital-efficient program than initially perceived. Despite the higher-than-anticipated spending on major capital projects in 2025 and the complexities related to the first year of integration with MRO, Wai believes that the improvements in the Lower 48 region are significant and should continue in subsequent years.
Wai’s assessment suggests that the temporary factors overshadowing the company’s performance, such as the integration costs and capital spending, are not indicative of the company’s long-term potential. The analyst emphasized the underlying improvements in efficiency, particularly within the Lower 48 operations, which are expected to contribute to the company’s growth moving forward.
ConocoPhillips has been focusing on a strategy that would see major capital spending decline annually post-2025. The company aims to leverage this strategy to enhance its free cash flow growth, which is anticipated to be robust even if pricing remains constant.
Barclays’ revised price target reflects a slight adjustment based on the company’s near-term spending and integration activities. However, the Overweight rating indicates that Barclays continues to view ConocoPhillips as a favorable investment opportunity, with the expectation of strong free cash flow growth and shareholder returns in the coming years. InvestingPro analysis suggests the stock is currently undervalued, with a "GOOD" overall financial health score. For deeper insights into COP’s valuation and growth potential, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, ConocoPhillips has been a focal point in the financial sector due to a series of impactful developments. JPMorgan analyst Arun Jayaram has increased the price target for ConocoPhillips shares to $127, maintaining an Overweight rating. This decision follows an earnings beat, a consistent outlook for 2025, and the company’s commitment to return $10 billion to shareholders in 2025 if current commodity prices persist.
ConocoPhillips has also been in the spotlight due to significant changes to its executive management team, including the appointment of Kontessa S. Haynes-Welsh as vice president and Controller, effective March 1, 2025. Concurrently, Philip M. Gresh will expand his responsibilities to include the role of Treasurer.
In terms of analyst coverage, TD Cowen initiated a Buy rating on ConocoPhillips with a $125.00 price target, highlighting the company’s scale, inventory depth, and potential for capital efficiency improvements. Mizuho (NYSE:MFG) Securities also maintained an Outperform rating with a price target of $134, anticipating an EBITDA beat in the company’s upcoming earnings report.
Finally, ConocoPhillips shares saw an uptick amid reports of impending stringent sanctions by the United States on the Russian oil industry. These recent developments underscore the dynamic nature of ConocoPhillips’ position in the market.
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