On 2.5% Down Day, Oppenheimer Views ConocoPhillips Valuation "Attractive"

ConocoPhillips COP is sharply lower as oil sold off overnight and into the morning. At the moment, ConocoPhillips is down 3 percent, while the United States Oil Fund LP USO is down nearly 4.5 percent.

The correlation to oil prices aside, Oppenheimer said that ConocoPhillips’ valuation is “attractive,” raising its price target by $5 to $80. ConocoPhillips has cut its capex by 32 percent from 2014, which will help the company protect its dividend and achieve “cash flow neutrality” in 2017.

In 2015 and 2016, Oppenheimer projected earnings of $1.4 billion and $3.6 billion, with operating cash flow of $11 billion and $13.7 billion, respectively. With capex and dividend expenditures, ConocoPhillips’ free cash flow will show a deficit of $4.1 billion this year and 1.4 billion in 2016.

Over the past three- and five-year periods, Oppenheimer pointed out, ConocoPhillips outperformed its peers, though it lagged performance of the S&P 500. Moving forward, Oppenheimer said that ConocoPhillips’ stock would reflect how quickly the company can “adjust to industry conditions.”