More Room For Growth In ConocoPhillips Stock?

COP: ConocoPhillips logo

[Updated 2022/01/31]

The looming conflict between Russia and Ukraine has pushed the Brent benchmark above $90 per barrel – subsequently benefiting upstream oil & gas companies including ConocoPhillips (NYSE: COP). In Q3, the company hinted toward increasing capital expenditure in 2022 as higher benchmark prices assist cash generation and profitability. The company’s oil, natural gas, natural gas liquids, and bitumen account for 48%, 37%, 8%, and 7% of the 4,459 MMBOE of total proved reserves. Also, 80% of the proved reserves are located in countries that belong to the  Organization for Economic Cooperation and Development. Thus, an uptick in oil and natural gas prices is likely to benefit COP stock in the near-term. Trefis highlights the quarterly trends in revenues, earnings, stock price, and expectations for Q4 2021 in an interactive dashboard analysis, ConocoPhillips Earnings Preview.

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Below you’ll find our previous coverage of ConocoPhillips stock where you can track our view over time.

[Updated 2022/01/12] – ConocoPhillips Stock Remains A Good Energy Sector Bet

ConocoPhillips (NYSE: COP) increased production while maintaining a lower capital expenditure plan to generate superior returns last year. Given high benchmark prices, the company hinted towards increasing capital expenses despite volatility in oil markets due to multiple waves of the pandemic and an uncertain demand environment. After observing a sharp drop, Brent reached the highs of $85/bbl assisted by favorable macroeconomic conditions and pent-up demand in October 2021. COP’s revenues depend on benchmark oil prices causing variability in profitability ratios. The Brent benchmark increased from $54 in 2017 to $71 in 2018, remained slightly lower at $63 in 2019, and subsequently declined to $41 in 2020. COP reported an operating cash flow margin of 22%, 33%, 30%, and 25% in 2017, 2018, 2019, and 2020, respectively. Considering the company’s aggressive capital allocation strategy and rising production in the U.S., Trefis believes that the stock is a good bet in the oil & gas industry.

[Updated 2021/11/29] – Are Odds In Favor Of ConocoPhillips Stock?

The coronavirus pandemic has taken another turn with the Omicron variant, putting brakes on the sharp economic recovery observed in the third quarter. On November 26, the S&P 500 fell by 2.3% and WTI benchmark dropped to $70/bbl after WHO’s announcement. Consequently, the shares of ConocoPhillips (NYSE: COP) declined by 5% as demand worries returned. At an annual dividend of $1.84 per share and a stock price of $71, COP’s current dividend yield stands at 2.6%. Thus, the stock remains a good pick for investors looking for economic returns. Amid the new variant scare, the OPEC and non-OPEC nations will meet on December 2 to discuss plans on further easing of production curtailments after the oil consuming countries indicated utilizing reserves to lower surging prices.

So is ConocoPhillips stock likely to decline further in the coming weeks and months or is a recovery looking more likely? Per the Trefis machine learning engine which analyzes historical stock price movements, COP stock has a 50% chance of a rise over the next month (21 trading days). See our analysis ConocoPhillips Stock Chance of Rise for more details.

Five Days: COP -1.7%, vs. S&P 500 -2.3%; Outperformed market (26% event probability)

  • ConocoPhillips stock declined 1.7% over a five-day trading period ending 11/26/2021, compared to the broader market (S&P500) which declined 2.3% over the same period.
  • A change of -1.7% or lower over 5-day period in 666 times out of 2515 (26%); Stock rose in the next 5 days in 360 of these 666 instances (54%)

Ten Days: COP -0.9%, vs. S&P 500 -1%; Outperformed market (40% event probability)

  • ConocoPhillips stock declined 0.9% over the last ten trading days (two weeks), compared to the broader market (S&P500) which declined by 1%.
  • A change of -0.9% or lower over 10-day period in 1015 times out of 2515 (40%); Stock rose in the next 10 days in 510 of these 1015 instances (50%).

Twenty-One Days: COP -4%, vs. S&P 500 1.1%; Underperformed market (28% event probability)

  • ConocoPhillips stock declined 4% over the last twenty-one trading days (about one month), compared to the broader market (S&P500) which rose by 1.1%.
  • Returns of -4% or lower over 21-day period in 708 times out of 2515 (28%); Stock rose in the next 21 days in 357 of these 708 instances (50%)

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

 Returns Jan 2022
MTD [1]
YTD [1]
Total [2]
 COP Return 24% 24% 78%
 S&P 500 Return -7% -7% 98%
 Trefis MS Portfolio Return -11% -11% 248%

[1] Month-to-date and year-to-date as of 1/31/2022
[2] Cumulative total returns since the end of 2016

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