EU and US could reach trade deal this weekend - Reuters
On Friday, JPMorgan analyst Arun Jayaram increased the price target for ConocoPhillips (BVMF:COPH34) shares (NYSE:COP) to $127 from $123, while sustaining an Overweight rating on the stock. Jayaram highlighted the company’s recent performance, noting that ConocoPhillips shares outperformed the S&P Oil & Gas Exploration & Production Select Industry Index (XOP) by 195 basis points on Thursday, following an earnings beat, an in-line outlook for 2025, and a pledge to return $10 billion to shareholders in 2025 if current commodity prices hold.
ConocoPhillips has acknowledged that the market has adopted a "show me" attitude regarding its recent acquisition of Marathon Oil Corporation (NYSE:MRO). With a solid market capitalization of $127.5 billion and a moderate debt level, the company maintains strong financial health, as indicated by InvestingPro’s analysis. Management has expressed eagerness to showcase the strategic and financial benefits of the transaction once the deal is finalized. Jayaram believes that after reviewing the updated guidance, management has presented a compelling argument for the value creation potential of the deal.
The commitment to a significant cash return to shareholders was a key point of discussion. While JPMorgan noted that ConocoPhillips could have refrained from specifying a cash return amount for this year, the decision to provide clarity to investors was seen as a positive move. This approach is particularly relevant as ConocoPhillips competes for investor capital against other energy giants like Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX).
The analyst’s commentary reflects a broader perspective on how energy companies are vying for the attention of large-cap investors in a volatile market. By offering a clear plan for shareholder returns, ConocoPhillips aims to differentiate itself and attract investment in a competitive sector.
In other recent news, ConocoPhillips has been making significant executive management changes. Kontessa S. Haynes-Welsh, previously the vice president and Treasurer, will assume the role of vice president and Controller effective March 1, 2025, following the retirement of Christopher P. Delk. Philip M. Gresh will expand his responsibilities to include the role of Treasurer, marking a strategic adjustment within the company’s senior management.
TD Cowen has initiated coverage on ConocoPhillips with a Buy rating, highlighting the company’s significant scale and potential for capital efficiency improvements following its recent acquisition of Marathon Oil. The firm anticipates benefits from the acquisition to become evident in 2025, with the company demonstrating strong returns on capital and maintaining low break-even costs.
Mizuho (NYSE:MFG) Securities has reiterated their Outperform rating on ConocoPhillips stock, foreseeing the company to slightly outperform market expectations with their upcoming earnings. The firm also underscores the potential for significant synergies following a strategic combination and expects the company’s 2025 capital budget to align with a ’low single digit’ volume growth.
ConocoPhillips has also completed a private exchange offer involving the exchange of up to $4.0 billion in aggregate principal amount of new notes. This strategic initiative involved the exchange of certain notes previously issued by Marathon Oil Corporation for new notes issued by ConocoPhillips Company and guaranteed by ConocoPhillips.
Lastly, amidst reports of new US sanctions on Russian oil, shares of major oil companies, including ConocoPhillips, saw an uptick. These anticipated sanctions are expected to disrupt the global oil supply, potentially leading to tighter markets and elevated oil prices, which could increase revenues for companies like ConocoPhillips.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.