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Investing.com - RBC Capital has raised its price target on ConocoPhillips (NYSE:COP) to $118.00 from $113.00 while maintaining an Outperform rating on the stock. According to InvestingPro data, the stock has seen a 7.66% decline over the past week, suggesting a potential buying opportunity as current analysis indicates the stock is undervalued.
The firm’s analysis suggests earnings per share and cash flow per share at the top of ConocoPhillips’ sensitivity ranges, implying $1.35-1.40 per share and $5.2 billion in total cash flow. The company’s strong financial position is reflected in its Good Financial Health Score, with trailing twelve-month earnings per share of $7.47 and a moderate P/E ratio of 11.82.
RBC notes that while formal 2026 guidance will be released early next year, preliminary indications suggest approximately 1-2% organic production growth with capital expenditures of around $12 billion.
Based on ConocoPhillips’ historical 45% payout trend, RBC’s model projects $8.5 billion in shareholder returns for the upcoming period.
Key topics of interest for investors include shareholder return ratios, potential divestitures and acquisitions, capital trajectory, inflation risks at the Willow project, and the pace of activity in the onshore Lower 48 operations.
In other recent news, ConocoPhillips has reported several significant developments. The company has signed a 20-year agreement with NextDecade to purchase 1 million tonnes per annum of liquefied natural gas from the Rio Grande LNG project in Texas. This agreement is contingent upon NextDecade’s final investment decision on Train 5 of the Brownsville facility. Additionally, ConocoPhillips has entered into another 20-year agreement with Sempra Infrastructure to acquire 4 million tonnes per annum of LNG from the Port Arthur LNG Phase 2 project in Texas, extending their existing partnership.
In terms of financial performance, ConocoPhillips exceeded second-quarter earnings expectations by approximately 3% compared to consensus estimates, with production surpassing Street forecasts by the same margin. Despite this positive performance, Raymond James has lowered its price target for ConocoPhillips to $115, maintaining an Outperform rating due to a lower commodity price strip. Furthermore, ConocoPhillips plans to reduce its workforce by 20-25%, as confirmed by a company spokesperson. These developments reflect ConocoPhillips’ strategic moves in LNG procurement and adjustments in response to market conditions.
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