ConocoPhillips has 'transformed its business' but still not a buy, Goldman says
Seeking Alpha
Published Jun 22, 2017 03:39PM ET
ConocoPhillips has 'transformed its business' but still not a buy, Goldman says
- ConocoPhillips (COP -0.4%) is resumed with a Neutral rating at Goldman Sachs (NYSE:GS), despite the "major positive" of its recent sale of Canadian oil sands assets to Cenovus Energy.
- Goldman says COP has transformed its business more rapidly than expected, executing $16B in asset sales YTD, well ahead of the company's $5B-$8B target, but there are fewer catalysts in H2 to move shares higher, especially after recent relative strength in which the stock has been the best performer among U.S. oil majors and large-cap E&Ps.
- The firm says it continues to favorably view COP's free cash flow inflection, disciplined approach to capital allocation and capital spending, and streamlining of its asset portfolio, but sees greater upside elsewhere via "long-term [free-cash-flow] generators among majors," including Canadian Natural Resources (CNQ +1.6%), Chevron (CVX) and Suncor Energy (SU +0.5%).
- Now read: Conoco Phillips: Lower Breakeven Gives Capital Gain Hopes
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