Bullish options flow was detected in COP stock on December 31, 2019.
On December 23, 2019, Piper Jaffray says that while the Energy sector currently does not provide a wide depth of names delivering attractive and/or sustainable yields, that should improve in the years ahead as companies continue to moderate spending, generate free cash flow and increasingly return cash to shareholders through dividends rather than share buybacks, Piper Jaffray analyst Pearce Hammond tells investors in a research note. His top Energy income ideas are Total, (TOT), Enterprise Products, Energy Transfer LP (ET), Phillips 66 (PSX), Valero (VLO), ConocoPhillips (COP), Noble Energy (NBL), Baker Hughes (BKR), Halliburton (HAL), Schlumberger (SLB), Berry Petroleum (BRY), Helmerich & Payne (HP), NexTier Oilfield, Solaris Oilfield (SOI), Brigham Minerals (MNRL) and Viper Energy (VNOM).
Keep in mind too that we are fast approaching the seasonally strong time of year for the Energy sector:
On December 13, 2019, Atlantic Equities analyst Barry MacCarthy initiated coverage of ConocoPhillips with an Overweight rating and $75 price target.
On December 11, 2019, Morgan Stanley analyst Devin McDermott noted that Exploration & Production stocks have trailed the market for a third straight year in 2019 as much of the E&P industry has struggled to deliver free cash flow and returns. The changing landscape in Energy favors large-cap, diversified E&Ps and Integrated Oil companies, says McDermott, who reiterates ConocoPhillips (COP) and Noble Energy (NBL) as his top picks in E&P and Chevron (CVX) as his top pick in Integrated Oil. Diversified large-caps have outperformed shale pure plays by about 35% year-to-date and he expects this trend to continue through 2020, McDermott added. Morgan Stanley oil strategist Martijn Rats sees Brent prices being range-bound and “anchored around” $60 per barrel in 2020, while he cut his 2020 Henry Hub price forecast for natural gas to $2.25/MMBtu from $2.50/MMBtu as he sees downside to benchmarks in Europe and Asia as oversupply is set to worsen in 2020, McDermott tells investors.
On December 6, 2019, MKM Partners analyst John Gerdes initiated coverage of ConocoPhillips with a Buy rating and $72 price target. The analyst cites the company’s Eagle Ford and Alaska assets as core growth and value drivers over the next several years with 9% free cash flow yield in 2020. Assuming NYMEX oil price of $55 per barrel and natural gas price at $2.65, Gerdes sees ConocoPhilips average free cash flow yield at 7% and annual production rate of 1% from 2021 through 2024.
On December 3, 2019, USD Partners LP (USDP) announced that it has executed long-term, multi-year renewals for the remaining capacity at its Hardisty Terminal with ConocoPhillips Canada (COP). Including these recent renewals, the Partnership has executed multi-year extensions for 100% of the capacity at its Hardisty Terminal. Also, in association with its Sponsor’s recently announced Joint Venture with Gibson Energy Inc. to construct a diluent recovery unit adjacent to the Hardisty Terminal, a material amount of the Hardisty Terminal’s current capacity will be extended beyond 2030, pending the successful construction and completion of the DRU. The DRU could be placed into service as early as the second quarter of 2021. The renewals contain take-or-pay terms with minimum monthly payments and rates that are consistent with those of the original terminalling services agreement with the customer. Additionally, ConocoPhillips Canada entered into renewals and extensions of the terminalling services agreements that cover 100% of the Partnership’s destination capacity at the Stroud terminal, commencing in January and June 2020.
On November 30, 2019, Barron’s Andrew Bary noted that the deeply unpopular energy sector is having a “harder time attracting investors,” and added that there is a “baby boomer/millennial divide, with younger investors more uncomfortable with energy stocks.” However, Mark Stoeckle, CEO of Adams Funds, argued that the energy industry is quickly evolving due to investor pressure, with “nearly every major company emphasizing capital discipline and boosting returns to shareholders through dividends and stock buybacks.” Stoeckle said, “More money is coming back to shareholders and less is going into the ground. At some point in the next 10 years, that will present an opportunity. Unless global demand falls off, there won’t be enough oil and gas to meet demand.” He recommended Chevron (CVX), ConocoPhillips (COP), BP (BP), and Total (TOT). Source: https://www.barrons.com/articles/why-energy-stocks-could-emerge-as-a-top-sector-in-the-next-10-years-51575052946
On November 26, 2019, ConocoPhillips filed a motion in a Delaware court to seize shares of Citgo parent PDVSA to collect on a $2B arbitration award against Venezuela, which owns PDVSA, Reuters’ Luc Cohen and Tom Hals report. Citgo is being targeted by various parties seeking payment from the South American country, but any transfer of its ownership is currently restricted by U.S. sanctions designed to force out President Nicolas Maduro, the authors note. Source: https://www.reuters.com/article/us-conocophillips-venezuela-citgo/conocophillips-files-motion-to-seize-citgo-shares-to-collect-venezuela-award-idUSKBN1Y02N4
On November 22, 2019, JPMorgan analyst Phil Gresh raised his price target for ConocoPhillips to $74 from $70 saying the company’s ten-year business plan through 2029 is “impressive.” The analyst feels the plan is realistic and keeps an Overweight rating on ConocoPhillips shares.
On October 29, 2019, when ConocoPhillips stated that production excluding Libya for the third quarter of 2019 was 1,322 thousand barrels of oil equivalent per day, or MBOED, a 98 MBOED increase over the same period a year ago. Adjusting for closed dispositions and acquisitions, underlying production increased 83 MBOED primarily due to production growth from the Big 3 unconventionals, development programs and major projects in Alaska, Europe and Asia Pacific. This growth more than offset normal field decline. Production from Libya averaged 44 MBOED. In the Lower 48, production from the Big 3 unconventionals averaged 379 MBOED. The company also completed construction and commissioning of the Montney Phase 1 gas plant in Canada, with startup awaiting completion of a third-party pipeline. In Malaysia, production from the Kebabangan Field continued ramping up and first oil was achieved from Gumusut Phase 2. Turnarounds were completed during the quarter in Alaska, Malaysia and Norway.
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