ConocoPhillips (COP) is expected to post stronger cash flow growth from 2025 to 2029 as major projects come online, Morgan Stanley said in a Monday note as it resumed coverage on the company with an overweight rating and a $128 price target.

The company's cash flow from operations is expected to rise by about 6% and free cash flow to increase by about 13% during the period, the investment bank said.

Morgan Stanley said the attractive cash flow growth from major projects is one of the three key pillars underpinning the company's overweight rating.

The other two are strong capital efficiency and Alaska's upside.

ConocoPhillips finalized its acquisition of Marathon Oil (MRO) last month and has raised its synergy target for the deal to $1 billion.

The updated target includes the original $500 million in general and administrative and operating cost reductions, expected within 12 months of closing, along with an additional $500 million from capital optimization and integrated operations, anticipated to be realized immediately after the acquisition, according to the note.

Morgan Stanley expects capital expenditures to reach $12.75 billion and shareholder returns to total approximately $10 billion, assuming a WTI oil price of $70 per barrel.

The firm said "a more constructive permitting environment" could lead to an opportunity for the company to appraise and develop more prospects in Alaska under the incoming Trump administration.

Price: 100.85, Change: -0.17, Percent Change: -0.17