Goldman Sachs’ Neil Mehta believes ConocoPhillips
Mehta upgraded the rating on the company from Neutral to Buy, while raising the price target from $47 to $54.
The analyst believes ConocoPhillips offers the most attractive free cash flow yield among its large cap U.S. majors and E&P peers.
Mehta sees the company as “a solid capital allocation story, with COP growing the dividend, reducing its share count and paying down debt, partly through asset sale proceeds.”
ConocoPhillips underperformed during 2016, largely due to its 66 percent dividend cut. However, capital returns are expected to grow again in 2017–2018, with annual dividend growth of 5–10 percent and share buyback of $1 billion per year.
“There remains skepticism about COP’s ability to execute its $5–$8 billion asset sale program by YE2017, based on investor conversations. That said, we see this level as achievable given the company’s track record of
Despite the capital spending of only $5 billion, Mehta believes the company could grow its production each year through the end of the decade.
Image Credit: By Knudsens Fotosenter / DEXTRA Photo [CC BY 4.0], via
|Nov 2016||Goldman Sachs||Upgrades||Neutral||Buy|
|Nov 2016||Edward Jones||Upgrades||Hold||Buy|
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