Morgan Stanley Reduces PT on ConocoPhillips (COP) Stock

ConocoPhillips (NYSE:COP) is one of the Best Bargain Stocks to Buy in November. On October 14, Morgan Stanley analyst Devin McDermott reduced the price objective on the company’s stock to $122 from $123, while keeping an “Overweight” rating. Notably, the firm anticipates clean Q3 operational updates. That being said, the firm also believes that the cash flow would likely be generally below consensus as a result of weaker gas and NGL realizations.

ConocoPhillips (NYSE:COP) completed the integration of Marathon Oil and is on track to deliver greater than $1 billion in synergies and over $1 billion of one-time benefits. ConocoPhillips (NYSE:COP) is also leveraging its scale and technologies to fuel a further $1 billion-plus in company-wide cost reductions and margin enhancements by 2026 end. Such efforts strengthen the company’s FCF generation. In a separate release, the company announced that it signed a long-term sales and purchase agreement (SPA) to lift 1 million tonnes per annum (MTPA) of LNG from the Rio Grande LNG project under development by NextDecade Corporation, near Brownsville, Texas.

Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), released its Q2 investor letter. Here is what the fund said:

ConocoPhillips (NYSE:COP) – The stock was purchased in the strategy during the quarter. ConocoPhillips is a leading independent exploration and production company with a global portfolio of low-cost, high-return assets and a disciplined capital allocation strategy. The company is approaching a free cash flow inflection as capital spending on major long-cycle projects begins to roll off in 2H25, improving its ability to return capital to shareholders. Management targets returning approximately 45% of operating cash flow through dividends and buybacks, supported by efficiency gains and a strong balance sheet. COP trades at 14.4x 2025 EPS and offers an ~8% capital return yield, presenting an attractive entry point amid a constructive long-term oil backdrop.

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Disclosure: None. This article is originally published at Insider Monkey.