Will ConocoPhillips Stock Continue To Underperform Post The Oil Price War Crisis?

ConocoPhillips (NYSE:COP), one of the largest upstream oil companies, saw its stock price decline by 25% on Monday, bringing its total decline from early February to 42%. Going by the performance of the company’s stock in the wake of the 2008 economic crisis, it is likely that the stock could continue to underperform the broader market post the ongoing crisis. Our conclusion is based on our detailed dashboard analysis ‘2008 Crisis vs. 2020 Coronavirus Comparison: How Did ConocoPhillips Stock Fare vs. S&P 500?‘, parts of which are highlighted below.

• On Monday, the U.S. markets saw their biggest sell-off since the 2008 crisis falling by over 7%.
• There were two distinct factors behind the sharp decline: a continued increase in the number of novel Coronavirus cases outside China, and a collapse in crude oil prices with Saudi Arabia boosting production.
• COP stock declined by 42% since the WHO declared a global emergency on January 31st and was down by about 25% on Monday, March 9th.
• The S&P 500 has declined by 17.5% since the WHO declared a global emergency on January 31st and declined by about 7.5% on Monday, February 9th.
• In comparison, Exxon Mobil, which is an integrated oil and gas company, saw its stock fall by about 32% since early February and by about 16% on Monday. View our analysis for Exxon Mobile here  2007-08 vs. 2020 Crisis Comparison: How Did Exxon Mobil Stock Fare vs. S&P 500?

ConocoPhillips vs. S&P 500 Stock Performance Over 2007-08 Financial Crisis

• COP stock declined from levels of around $57 in October 2007 (the pre-crisis peak) to levels of around $25 in March 2009 (as the markets bottomed out) and rebounded to levels of about $36 in early 2010.
• COP stock declined by as much as 55% between the market’s approximate pre-crisis peak and when the markets bottomed out. The decline was slightly worse compared to the S&P, which fell 51% in the same period.
• Between March 2009 and January 2010, COP stock rose by about 41%, compared to the S&P, which was up by 48%.

Conclusion

• Although ConocoPhillips stock has seen a sharp decline due to the Coronavirus/Oil Price War crisis and has fared worse than the broader markets, going by the 2008 financial crisis, it looks very likely that the stock could continue to underperform the broader markets.

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