ConocoPhillips-Marathon Synergy Will Boost Free Cash Flow And Stock Buyback: Analyst

Analysts expressed views on ConocoPhillips’ COP mixed third-quarter results.

On Thursday, ConocoPhillips reported an adjusted EPS of $1.78, beating estimates; revenue of $13.6 billion vs. $14 billion expected.

The company boosted its quarterly dividend by 34% to $0.78/share. The company raised the outlook for FY24 production to 1.94-1.95 MMBOED (from 1.93 to 1.94 MMBOED).

Truist Securities analyst Neal Dingmann expects pro forma FCF to rise substantially due to strong organic performance and additional cash flow from Marathon Oil. The analyst reiterated the Buy rating and $138 price target on COP.

With stable prices, ConocoPhillips could potentially repurchase nearly all shares issued to MRO within 6-7 quarters, assuming the dividend remains steady and debt repayment is deprioritized, given the company’s strong balance sheet, adds the analyst.

The analyst says that ConocoPhillips’ FCF is anticipated to be driven by a balanced portfolio, including Lower 48 activities, LNG projects, and Alaskan operations.

Dingmann revised EBITDAX estimates to $24.988 billion (from $24.719 billion) vs. consensus of $24.443 billion for 2024 and $33.208 billion (from $33.745 billion) vs. estimate of $27.939 billion for 2025.

Scotiabank analyst Paul Y.Cheng expects ConocoPhillips’ (Sector Perform, $115 price target) third-quarter 2024 results to positively influence its near-term share price performance.

The analyst estimates adjusted EPS of $7.40 and EBITDA of $22.912 billion in 2024.

Investors can gain exposure to the COP stock via Texas Capital Funds Trust Texas Capital Texas Oil Index ETF OILT and IShares U.S. Oil & Gas Exploration & Production ETF IEO.

Price Action: COP shares are down 1.66% at $107.71 at the last check Thursday.

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