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On Monday, Raymond (NSE:RYMD) James made a notable change to ConocoPhillips’ (NYSE:COP) stock rating, downgrading it from a Strong Buy to an Outperform. Alongside the rating adjustment, the firm also reduced the price target for the energy company’s shares to $124 from the previous $157. Currently trading at $98.36, near its 52-week low of $94.23, the stock has attracted attention from analysts, with 13 recently revising their earnings estimates upward according to InvestingPro data.
The revision follows ConocoPhillips’ fourth quarter results, which exceeded expectations with earnings roughly 8% higher than what analysts had predicted. With a market capitalization of $125.49 billion and a P/E ratio of 12.59, ConocoPhillips also reported production levels that surpassed the upper end of their guidance, thanks to robust performance from the Lower 48 states operations, which saw a year-over-year growth of 5%.
The initial benefits from the recent acquisition of Marathon Oil (NYSE:MRO) are becoming evident, particularly in the company’s capital expenditure guidance for 2025. The forecasted capex is under $13 billion, compared to the pro forma capex of $13.5 billion for the combined ConocoPhillips-Marathon Oil operations in 2024.
ConocoPhillips’ production guidance for the fiscal year 2025 and the first quarter of 2025 aligns closely with the estimates from Raymond James and other analysts. The first quarter projections include an expected impact from weather-related disruptions and maintenance turnarounds, accounting for a 20 thousand barrels of oil equivalent per day (Mboe/d) and 5 Mboe/d reduction, respectively.
Despite the downgrade, Raymond James still views ConocoPhillips as one of the most efficiently managed exploration and production companies, with a strong global asset portfolio. The firm also finds the stock to be attractive from a valuation standpoint, considering both discounted cash flow and multiple bases. This assessment aligns with InvestingPro’s analysis, which indicates the stock is currently undervalued and maintains a "GOOD" overall financial health score. For deeper insights into COP’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
The decision to downgrade the stock to an Outperform rating stems from the absence of a near-term catalyst that could drive significant growth. Raymond James also attributes the lower price target of $124 primarily to a weaker commodity price environment since their last assessment.
In other recent news, ConocoPhillips has been the focus of several analyst notes and significant executive changes. Barclays (LON:BARC) has adjusted the price target for ConocoPhillips to $135 from $137, maintaining an Overweight rating, noting the company’s potential for strong free cash flow growth. Similarly, JPMorgan has increased its price target for the company to $127 from $123, keeping its Overweight rating. The firm highlighted ConocoPhillips’ commitment to returning substantial cash to shareholders in 2025.
Meanwhile, TD Cowen initiated coverage on ConocoPhillips with a Buy rating and a $125.00 price target, emphasizing the company’s potential for capital efficiency improvements following its acquisition of Marathon Oil. Mizuho (NYSE:MFG) Securities maintained an Outperform rating and a price target of $134, anticipating ConocoPhillips to slightly outperform market expectations with their upcoming earnings.
In addition to these analyst notes, ConocoPhillips has announced significant changes to its executive management team following the retirement announcement of Christopher P. Delk, the company’s vice president, Controller, and General Tax Counsel. Kontessa S. Haynes-Welsh will step into the role of vice president and Controller, while Philip M. Gresh will expand his responsibilities to include the role of Treasurer. These recent developments reflect ConocoPhillips’ strategic adjustments and continued commitment to growth and shareholder returns.
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