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Here's Why Retain Strategy is Apt for ConocoPhillips (COP) Now

ConocoPhillips COP is a leading upstream energy firm. The company, carrying a Zacks Rank #3 (Hold), has witnessed upward estimate revisions for 2023 earnings in the past 30 days.

Factors Working in Favor

West Texas Intermediate crude price, trading at more than $70 per barrel, is extremely favorable for upstream activities. Being a leading exploration and production company globally, ConocoPhillips is well-positioned to capitalize on handsome crude prices. It has a strong footprint in prolific oil-rich plays like the Permian Basin, Eagle Ford and Bakken, brightening the company’s production outlook. For 2023, ConocoPhillips expects production at 1.76 to 1.80 million barrels of oil equivalent per day (MMBoE/D), suggesting an improvement from 1.74 MMBoE/D for 2022.

COP is strongly focused on returning capital to shareholders. Last year, the upstream firm returned as high as $15 billion to shareholders. The company employed a three-tier framework that comprised $5.7 billion in cash distributions through the ordinary dividend and variable return of cash route, while the remaining $9.3 billion was distributed through share repurchases.

Risks

Being an upstream energy player, the overall operations of the company are strongly exposed to volatility in oil and natural gas prices. Moreover, increasing exploration expenses are hurting its bottom line.

Stocks to Consider

Better-ranked players in the energy space include Murphy USA Inc. MUSA, Sunoco LP SUN and Antero Midstream Corporation AM. While Murphy USA and Antero Midstream carry a Zacks Rank #2 (Buy), Sunoco sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Murphy USA is a well-known name as a prime retailer of gasoline and convenience merchandise. MUSA, having more than 1,700 stores, has witnessed upward earnings estimate revisions in the past 60 days for 2023 earnings.

Sunoco has a stable business model while transporting motor fuel to roughly 10,000 convenience stores. In the past 30 days, Sunoco has witnessed upward earnings estimate revisions for 2023.

Antero Midstream generates stable cashflows, banking on its midstream assets involved in gathering, compression, processing and fractionation activities. The properties are centered around the prolific Appalachian Basin. Over the past 30 days, Antero Midstream has witnessed upward earnings estimate revisions for 2023.

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ConocoPhillips (COP) : Free Stock Analysis Report

Sunoco LP (SUN) : Free Stock Analysis Report

Antero Midstream Corporation (AM) : Free Stock Analysis Report

Murphy USA Inc. (MUSA) : Free Stock Analysis Report

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