Deutsche Bank Reiterates “Buy” Rating on ConocoPhillips (COP)

in Debt Gold Gold Investment by admin — March 18, 2010 6:12 am | no comments

Oil producer ConocoPhillips ( COP ) saw its “Buy” rating reiterated on Thursday by analysts at Deutsche Bank. The analyst also backed up its $60 price target for COP shares, which had closed at $52.98 on Wednesday. The firm noted that “We came into March’s mad oil analyst meeting season with the view that only ConocoPhillips had the potential for a catalyst, new-news event. We retain that view. We think that the company can re-iterate big disposals ($15bn est, including LUKOIL ( LUK )) constrained capex, & long term growth from a lower base. We also believe that material plans must be released if COP’s target of cutting refining to just 15% of capital employed is to be met. With just $6bn of debt to pay down, we believe FCF potential will impress on generous dividend raises & $10bn+ buyback.” “The simple bull argument is the free cash flow generation. In this note we outline what we think is a potential $6bn this year, $13bn next for a share count reduction approaching 22% by end 2011…Risks include a disappointing execution of their recently announced restructuring plan, much weaker oil and gas prices, or an unexpected acquisition that puts further pressure on equity holders.” ConocoPhillips shares were mostly flat in premarket trading Thursday. The Bottom Line We have been recommending shares of COP since Oct.7, when the stock was trading at $48.41. The company has a 3.78% dividend yield, based on last night’s closing stock price of $52.98. ConocoPhillips ( COP ) is a “recommended” dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .