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Wall Street upgrades oil and gas stock ConocoPhillips on rising dividends

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Key Points
  • Jefferies raises its rating on ConocoPhillips to buy from hold due to the likelihood of increasing share buybacks and dividends.
  • The firm increases its price target for the oil and gas company to $59 from $55, representing 25 percent upside from Tuesday's close.
Conoco Phillips Bayu Undan Timor in Sea, Australia
Source: Conoco Phillips

Investors should buy ConocoPhillips shares because the oil and gas company will increase its capital return to shareholders, according to Jefferies, which raised its rating on ConocoPhillips to buy from hold.

"COP has recast its business model since the oil price downturn and is now focusing on returns rather than chasing growth. The company has aggressively cut both capital spending and operating expenses," analyst Jason Gammel wrote in a note to clients Wednesday. "Management has expressed a commitment to returning cash to shareholders."

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