Buy ConocoPhillips as cash flow to double next year on higher oil prices, Cowen says
Investors should buy ConocoPhillips shares as the energy company's financial results will benefit from rising oil prices, according to Cowen, which raised its rating on the firm to outperform from market perform. "COP's unique portfolio provides it with the ability to increase cash flow without materially increasing its capital program," analyst Charles Robertson wrote in a note to clients Monday. The company has "portfolio leverage to Brent benefits from OPEC cut. We see COP's EBITDA increasing over 100% YoY, mainly from the increase in commodity price" to $55 per barrel. Oil prices hit an 18-month high Monday after OPEC and non-OPEC countries agreed to reduce production. The price of crude oil is up more than 20 percent in the past month and more than 40 percent this year. Robertson raised his ConocoPhillips price target to $59 from $47, representing 16 percent upside from Friday's close. The analyst cited how the company significantly cut operating expenses during the oil price downturn the past two years. As a result, he predicted free cash flow will rise to more than $5 billion next year, including asset sales from negative $2 billion in 2014 due to higher energy prices. ConocoPhillips' "planned divestitures of North American natural gas assets will likely be for a higher multiple than the market expects. With this divestiture, the company will be in a unique position to return cash to shareholders," he wrote. — CNBC's Michael Bloom contributed to this story.

ConocoPhillips Co. signage is displayed on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Nov. 4, 2016. Michael Nagle | Bloomberg | Getty Images