UPDATE: UBS Upgrades ConocoPhilips

ConocoPhillips (NYSE: COP) was upgraded Monday by UBS from Sell to Neutral with a price target reduced from $80 to $78.

Analysts led by William A. Featherston noted in a report that the shares seem to be fairly valued versus close peers after a recent pullback in the stock.

Featherston’s report suggested that since "the downstream spin, ConocoPhilips has traded within a dividend yield range of 3.3 percent to 5.3 percent, pushing up its valuation multiples vs. pure-play E&P peers despite lower relative growth."

The company’s "high yield should continue to support its valuation; assuming a 5 percent dividend increase in 2015 (to ~$3.08 per share share) and 4.5% yield implies downside support of $68 per share."

As for risks, the report highlighted concerns over "1) ongoing cash flow outspend...2) upside risk to long term capex guidance of $16.5-$17 billion in order to achieve its growth targets; 3) above average leverage to US natural gas relative" to peers.

ConocoPhillips recently traded at $74.64, down 0.21 percent.