Boston, MA 10/07/2014 (wallstreetpr) – ConocoPhillips (NYSE:COP) shares got mixed opinion from UBS analyst William Featherston. The brokerage slashed its price target on the company’s shares. However, it has upgraded the shares of the company.
Price Objective Reduced
UBS analyst cited the recent pullback in the stock and believes that it was fairly valued compared to its peers, Benzinga reported. Therefore, he chose to cut his price tag to $78 on the shares of ConocoPhillips (NYSE:COP) from $80 predicted by him earlier.
However, the analyst upgraded the shares of ConocoPhillips (NYSE:COP) to a rating of Neutral from Sell rating. He pointed out that the stock traded in a dividend yield range between 3.3% and 5.3%, and that pushed up its valuation multiples compared to pure-play E&P competitors despite weaker growth in comparison.
Featherston said that higher yield would continue to support the valuation of ConocoPhillips (NYSE:COP) shares. He said that assuming a 5% increase in the dividend rate in 2015 and a yield of 4.5% implied that the stock would get a downside support of $68. The analyst listed risk factors such as ongoing cash flow outspend, above than the average leverage to the U.S. natural gas compared to its peers; and higher risks to long-term capex outlook.
Other Brokerages
UBS is not the only brokerage to update the shares of ConocoPhillips. In September, Bank of America Corp (NYSE:BAC) upgraded the shares of ConocoPhillips (NYSE:COP) to Neutral from Under perform. Similarly, in August, Simmons & Co. upgraded the shares of the oil and gas company to Overweight from Neutral rating.
The consensus among the three brokerages is for Neutral rating. Significantly, none of the three brokerages has recommended the stock for Sell rating.
Dividend Rate
Recently, ConocoPhillips announced that its board has approved a quarterly cash dividend of 73 cents a share to all its eligible shareholders. ConocoPhillips (NYSE:COP) has fixed recorded date of October 14, and the dividend would be paid on December 1.
