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ConocoPhillips Is A Top Sector Yield Name, BofA Says

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ConocoPhillips Is A Top Sector Yield Name, BofA Says

Within a peer group that prioritizes dividends over growth, relative value had shifted to ConocoPhillips (NYSE: COP), BofA Merrill Lynch’s Doug Leggate said in a report. The analyst maintained a Buy rating for the company, with a price objective of $71.

Although ConocoPhillips has a low dividend payout of 2.2 percent and a dividend cut earlier this year was viewed negatively by investors, analyst Doug Leggate named the company as the “top ‘free cash’ yield idea.” He added that ConocoPhillips was well positioned to deliver outsize returns to shareholders via buybacks, while “potentially supporting competitive ‘growth per share’ that bridges the gap between the majors and the E&Ps.”

Under Supply In Commodity

There could be “an accelerated rebalancing” of global supply and demand commencing in the back half of 2016, as non-OPEC growth stalls. Supply disruptions could occur again, while the global inventory cushion weakens.

“With the consequence of under investment in both short & long cycle projects, we believe the commodity discussion is poised for a shift towards one of under supply and increased risk that oil prices overshoot to the upside. In that scenario, ‘big oil’ would likely lag more levered peers, further positioning COP as our preferred major oil name,” Leggate wrote.

Latest Ratings for COP

DateFirmActionFromTo
Apr 2021KeybancMaintainsOverweight
Mar 2021B of A SecuritiesDowngradesBuyNeutral
Mar 2021Morgan StanleyMaintainsOverweight

View More Analyst Ratings for COP
View the Latest Analyst Ratings

 

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Posted-In: BofA Merrill Lynch Doug LeggateAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas

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GIKColliers SecuritiesInitiates Coverage On14.0
SANWLake StreetInitiates Coverage On6.0
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