Houston, Texas-based ConocoPhillips (COP) explores, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids. With a market cap of $125.7 billion, ConocoPhillips’ operations span various countries in the Americas, Europe, and Asia-Pacific.
ConocoPhillips stock has lagged behind the broader market by a large margin over the past year. COP stock prices have declined 2.1% on a YTD basis and 4.1% over the past 52 weeks compared to the S&P 500 Index’s ($SPX) surge of 24.3% on a YTD basis and 35.8% over the past year.
Narrowing the focus, ConocoPhillips also underperformed the SPDR S&P Oil & Gas Exploration & Production ETF’s (XOP) 2.2% gains on a YTD basis and a 2.6% decline over the past 52 weeks.
Despite ConocoPhillips' underperformance relative to the S&P 500 over the past year, its stock prices have observed a significant rally recently, soaring 10.3% over the past five trading sessions. The surge was notably driven by the release of its better-than-expected Q3 earnings on Oct. 31, which saw COP stock surge 6.4%. It reported a non-GAAP adjusted EPS of $1.78, surpassing Wall Street’s earnings estimates by an impressive 6%, thereby boosting investor confidence.
However, ConocoPhillips’ underlying challenges are still evident. Its sales and other operating revenues declined 8.5% year-over-year to $13 billion, missing analysts’ projections. Additionally, the company reported a substantial increase in production and operating expenses, as well as depreciation, depletion, and amortization, leading to a contraction in net margins. This translated into a staggering 26.4% decline in net income to $2.1 billion compared to the year-ago quarter.
For the current fiscal year, ending in December, analysts expect COP to report an 11.1% year-over-year decline in adjusted EPS to $7.80. The company’s earnings surprise history is mixed. It surpassed Wall Street’s earnings estimates thrice over the past four quarters while missing on one other occasion.
COP stock has a consensus “Strong Buy” rating overall. Among the 24 analysts covering the stock, 18 recommend “Strong Buy,” one advises “Moderate Buy,” and five suggest a “Hold” rating.
This configuration has been consistent over the past months.
On Nov. 1, Mizuho analyst Nitin Kumar maintained a “Hold” rating while raising the price target to $132.
The mean price target of $133.69 suggests a potential upside of 17.7%. Meanwhile, the street-high target of $151 represents a premium of 32.9% to current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
