ConocoPhillips initiated with an Overweight at Morgan Stanley

Morgan Stanley initiated coverage of ConocoPhillips (COP) with an Overweight rating and $128 price target ConocoPhillips shares have underperformed E&Ps by 13% and Integrated Energy by 19% year-to-date, notes the analyst, who says the company has “slightly lower” near-term free cash flow yield than E&P peers, but stronger growth. Production is set to rise at a 4-5% compound annual growth rate and as key projects come online over the balance of the decade, free cash flow should rise at a faster rate than volumes, the analyst tells investors.