Friday, Mizuho updated its valuation model for ConocoPhillips (NYSE:COP), resulting in a raised price target for the energy company's shares. The new target is set at $139, increased from the previous $132, while the firm maintains a Neutral rating on the stock.
The adjustment follows the year-end 2023 reserve updates and the guidance provided for 2024. Mizuho's update came after ConocoPhillips released its fourth-quarter 2023 earnings, which included anticipated updates on the company's capital budget and capital return targets for the year.
ConocoPhillips has set its capital expenditures (Capex) for 2024 between $11.0 billion and $11.5 billion, aligning with the decade-long plan presented at the 2023 Analyst Day. However, the company has revised its capital return target downward to $9 billion from the previous $11 billion.
The revised plan places a greater focus on share buybacks, which are expected to account for approximately 60% of the total return target.
Mizuho believes that the current market valuation of ConocoPhillips already accounts for the company's high-quality assets and depth. The firm's stance is that these attributes are well recognized in the company's premium valuation when compared to its industry peers.
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