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Here's Why Hold Strategy is Apt for ConocoPhillips (COP) Now
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ConocoPhillips (COP - Free Report) , a leading upstream energy firm in the world in terms of production and reserves, is well-positioned to capitalize on handsome crude prices. Currently, the firm carries a Zacks Rank #3 (Hold).
Factors Working in Favor
West Texas Intermediate crude price, hovering around $85 per barrel, is highly favorable for upstream activities.
ConocoPhillips has secured a solid production outlook thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, the Permian Basin and Bakken shale. ConocoPhillips boasted that drilling and completion activities are increasingly becoming efficient in all the key U.S. basins.
Compared to composite stocks belonging to the industry, the leading upstream energy company has considerably lower exposure to debt capital. This reflects that COP is better positioned to rely on its strong balance sheet to withstand any adverse business scenario.
Risks
Being an upstream energy player, the company’s overall operations are exposed to volatility in oil and natural gas prices. Moreover, the company’s overall operating and production expenses continue to increase, hurting the bottom line.
Sunoco, the leading independent fuel distributor in the United States, has a stable business model and relatively lower exposure to commodity price volatility. This is because the partnership distributes fuel to branded distributors under long-term contracts.
Shell also has the ambitious target of becoming a net-zero emissions energy player by 2050 or earlier. By 2030, the integrated energy company plans to lower absolute emissions by 50%.
Murphy USA is a renowned retailer of gasoline and convenience goods, distinguished by its adaptable business model that effectively enhances profitability during periods of economic expansion and recession.
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Here's Why Hold Strategy is Apt for ConocoPhillips (COP) Now
ConocoPhillips (COP - Free Report) , a leading upstream energy firm in the world in terms of production and reserves, is well-positioned to capitalize on handsome crude prices. Currently, the firm carries a Zacks Rank #3 (Hold).
Factors Working in Favor
West Texas Intermediate crude price, hovering around $85 per barrel, is highly favorable for upstream activities.
ConocoPhillips has secured a solid production outlook thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, the Permian Basin and Bakken shale. ConocoPhillips boasted that drilling and completion activities are increasingly becoming efficient in all the key U.S. basins.
Compared to composite stocks belonging to the industry, the leading upstream energy company has considerably lower exposure to debt capital. This reflects that COP is better positioned to rely on its strong balance sheet to withstand any adverse business scenario.
Risks
Being an upstream energy player, the company’s overall operations are exposed to volatility in oil and natural gas prices. Moreover, the company’s overall operating and production expenses continue to increase, hurting the bottom line.
Stocks to Consider
Some better-ranked energy companies include SunocoLP (SUN - Free Report) , Shell plc (SHEL - Free Report) and Murphy USA Inc. (MUSA - Free Report) . While Sunoco and Murphy sport a Zacks Rank #1 (Strong Buy), Shell carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco, the leading independent fuel distributor in the United States, has a stable business model and relatively lower exposure to commodity price volatility. This is because the partnership distributes fuel to branded distributors under long-term contracts.
Shell also has the ambitious target of becoming a net-zero emissions energy player by 2050 or earlier. By 2030, the integrated energy company plans to lower absolute emissions by 50%.
Murphy USA is a renowned retailer of gasoline and convenience goods, distinguished by its adaptable business model that effectively enhances profitability during periods of economic expansion and recession.