Goldman Sachs Updates U.S. Conviction List with New Additions
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy COP?
Source: seekingalpha
- New Additions: Goldman Sachs updated its U.S. conviction list at the start of the month, adding ConocoPhillips (COP) and Loar Holdings (LOAR), while removing Huntington Ingalls Industries (HII), MSG Entertainment (MSGE), and Valero Energy (VLO), indicating a proactive approach to new investment opportunities.
- ConocoPhillips Outlook: Analysts highlighted that ConocoPhillips is on the verge of a positive free cash flow inflection, expected to transition over the next three years from heavy project investments to an ‘investment harvesting’ phase, with major projects coming online and reduced capex, significantly improving its financial health.
- Loar Holdings Growth Potential: As an aerospace parts supplier, Loar Holdings is recognized as a high-quality Aerospace & Defense ‘earnings compounder,’ with strong margins and free cash conversion, positioned well for long-term growth and margin expansion in its early stages.
- Market Reaction: Goldman’s update reflects keen insights into market dynamics, particularly in the energy and aerospace sectors, prompting investors to monitor these companies' performances and potential returns in the evolving economic landscape.
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Analyst Views on COP
Wall Street analysts forecast COP stock price to fall
19 Analyst Rating
15 Buy
3 Hold
1 Sell
Moderate Buy
Current: 118.520
Low
98.00
Averages
115.67
High
133.00
Current: 118.520
Low
98.00
Averages
115.67
High
133.00
About COP
ConocoPhillips is an exploration and production company. Its Alaska segment primarily explores for, produces, transports and markets crude oil, natural gas and NGLs. The Lower 48 segment consists of operations located in the 48 contiguous states in the United States and the Gulf of Mexico. Canadian operations consist of the Surmont oil sands development in Alberta, the liquids-rich Montney unconventional play in British Columbia and commercial operations. The Europe, Middle East and North Africa segment consists of operations principally located in the Norwegian sector of the North Sea, the Norwegian Sea, Qatar, Libya, Equatorial Guinea and commercial and terminalling operations in the United Kingdom. Asia Pacific segment has exploration and production operations in China, Malaysia, Australia and commercial operations in China, Singapore and Japan. Other International segment includes interests in Colombia as well as contingencies associated with prior operations in other countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Stock Price Surge: ConocoPhillips shares have started 2026 strong, gaining over 20% to surpass $110, primarily driven by rising crude oil prices, indicating market optimism about its future performance.
- Cash Flow Surge: The company expects to generate an additional $1 billion in free cash flow this year, entirely from cost savings, alongside last year's $19.9 billion in operating cash flow, showcasing its strong profitability on a low-cost resource base.
- Repurchase Program: ConocoPhillips repurchased $5 billion of its shares last year and is expected to increase buybacks in 2026, having repurchased nearly 10% of its outstanding shares over the past five years, enhancing the growth potential of free cash flow per share.
- Future Outlook: With major expansion projects nearing completion, free cash flow is projected to nearly double in the coming years, and combined with rising oil prices and the repurchase program, the stock price could reach $200 by the end of the decade, reflecting strong market confidence in its long-term growth.
See More
Market Rebounds as ADP Employment Data Exceeds Expectations
- Strong Employment Data: The ADP report indicates that private payrolls increased by 63,000 in February, surpassing the Dow Jones estimate of 48,000, which suggests a robust recovery in the labor market and alleviates concerns about economic slowdown.
- Services PMI Rebound: The Institute for Supply Management's Services PMI rose to 56.1 in February, the highest level since July 2022, indicating a rebound in economic activity, while the drop in prices paid by service organizations suggests potential easing of inflationary pressures.
- Oil Market Volatility: Despite ongoing conflict in Iran, oil prices saw their first decline on Wednesday, reflecting market concerns over rising energy prices, and comments from the Treasury Secretary may influence the oil market and overall market sentiment.
- Apple's New Product Launch: Apple introduced the new MacBook Neo with a starting price of $599, significantly lower than other models, appealing to budget-conscious consumers and expanding its share in the lower-priced laptop market.
See More
US Stocks Rise on Economic Strength Amid Iran War Concerns
- Strong Economic Data: The February ADP employment report revealed an addition of 63,000 jobs, surpassing expectations of 50,000, indicating continued growth in the labor market and bolstering investor confidence in economic recovery.
- Service Sector Expansion: The US services index unexpectedly rose to 56.1, marking the fastest expansion in 3.5 years, while service price pressures fell to an 11-month low, demonstrating economic resilience that could further drive stock market gains.
- International Situation Impact: Reports of Iran making indirect contact with the US to negotiate an end to the war boosted market sentiment, although Iranian media denied the claims, the hope for an early resolution to the conflict remains.
- Oil Price Volatility: Despite crude oil prices being affected by the Iranian drone attack and the closure of the Strait of Hormuz leading to production cuts in Iraq, the market estimates a risk premium of $18 per barrel, reflecting heightened concerns over energy supply.
See More
US Stocks Fluctuate Slightly Amid Oil Price Pressures
- Market Movements: The S&P 500 Index rose by 0.03%, while the Dow Jones Industrial Average fell by 0.11%, and the Nasdaq 100 Index increased by 0.63%, reflecting a slight recovery in the market following reports of indirect contact between Iran and the US to negotiate an end to the conflict, despite ongoing global trade tensions.
- Employment Data Impact: The February ADP employment report indicated an increase of 63,000 jobs, surpassing expectations of 50,000, suggesting a resilient labor market that may support the stock market, while also raising concerns about Federal Reserve policy direction.
- Oil Price Fluctuations: Crude oil prices fell by over 1% after Iran proposed discussions with the US to end the conflict, compounded by Treasury Secretary's comments on potential 15% tariffs on imports, adding to market uncertainty.
- Economic Outlook: This week, the market will focus on US-Iran war news, corporate earnings, and economic data, with expectations for a slight decline in the February ISM services index and an increase of 3,000 in initial unemployment claims to 215,000, highlighting the complexities of economic recovery.
See More
Market Dynamics and Investment Opportunities Analysis
- Oil Price Volatility: Global benchmark Brent crude has fallen from yesterday's high of $85.12 to around $81, with Treasury Secretary Scott Bessent indicating that the Trump administration plans to announce measures to stabilize oil flows in the Persian Gulf, highlighting the need for policy intervention.
- CrowdStrike's Strong Earnings: CrowdStrike exceeded expectations across key financial metrics, with CEO George Kurtz emphasizing that AI serves as a tailwind for data protection rather than a hindrance, and despite cautious market sentiment, the stock remains flat, indicating investor confidence in its long-term prospects.
- Ross Stores' Robust Performance: Ross Stores reported a 9% increase in same-store sales for the holiday quarter, significantly surpassing the 5.1% consensus, leading to a nearly 7% premarket stock rise, demonstrating strong consumer acceptance of its off-price retail model.
- Target Stock Upgrades: Following a surprisingly positive report, Target received two upgrades from analysts, with Bernstein moving from sell to hold and Telsey Advisory Group upgrading from hold to buy with a target price of $145, reflecting market optimism regarding the new CEO's potential impact.
See More
U.S. to Support Oil Trade in the Gulf
- Oil Price Decline: U.S. crude oil prices fell 1.1% to $73.74 per barrel on Wednesday, marking the first drop since the U.S. initiated military actions against Iran, indicating market concerns over future developments.
- Government Support Measures: Treasury Secretary Scott Bessent announced that the Trump administration will provide insurance for oil tankers in the Gulf through the International Development Finance Corporation and promised naval escorts if necessary, aiming to restore market confidence.
- Strait of Hormuz Traffic Standstill: Tanker traffic through the Strait of Hormuz has nearly come to a halt as ship owners fear Iranian retaliatory strikes, with the strait being the world's most critical chokepoint for oil trade, accounting for about 20% of global oil consumption.
- Market Reaction: Despite a 6% and 5% increase in U.S. crude prices on Monday and Tuesday respectively, market sentiment turned cautious following Bessent's announcement of further support measures, leading to a decline in oil prices.
See More
