S&P MAINTAINS BUY RECOMMENDATION ON SHARES OF CONOCOPHILLIPS
(S&P Capital IQ)
We up our '12 EPS estimate $0.41 to $5.57 and '13's by $0.40 to $5.95, reflecting a Q3 beat of $0.27. Q3 adj. EPS is $1.44, vs. $1.40 (ex. spunoff refining), on better price realizations due to a wider Brent-WTI spread. The high end of guidance is lowered, and COP sees 1.57-1.58 MMBOE/d in '12, but targets 3%-5% growth per year. Production has fallen 7% since Q1, on asset sales and turnarounds, but was up from COP's Q3 forecast. Dividend yield of 4.7% is the best in its peer group, comparing favorably to integrated oils. Our target price is $64, implying 16% potential return.