ConocoPhillips (COP) | Investment Case

1. Company Snapshot

1.a. Company Description

ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids worldwide.It primarily engages in the conventional and tight oil reservoirs, shale gas, heavy oil, LNG, oil sands, and other production operations.The company's portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; various LNG developments; oil sands assets in Canada; and an inventory of conventional and unconventional exploration prospects.

ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.

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1.b. Last Insights on COP

ConocoPhillips faces challenges due to a decline in earnings, with Q2 earnings expected to drop 31% year-over-year. The company's low-cost global portfolio helps it stay resilient, but volatile oil prices pose a challenge. Despite a strong balance sheet and low debt, COP's stock has slumped over 7% this year. RBC maintains an "outperform" rating, citing consistent free cash flow and strong shareholder returns. A steady strategy is expected to yield results, with a price target lifted to $118.

1.c. Company Highlights

Last Price	93.69
Change Percentage	0.61%
Open	92.27
Previous Close	93.12
Market Cap ( Millions)	116724
Volume	7455582
Year High	106.2
Year Low	79.88
M A 50	89.82
M A 200	92.4

FCF Yield	14.24%
Dividend Yield	3.39%
ROE	13.56%
Debt / Equity	36.17%
Net Debt / EBIDTA	70.75%
Price To Book	1.8
Price Earnings Ratio	13.21
Price To FCF	7.02
Price To sales	1.94
EV / EBITDA	5.24

2. ConocoPhillips' Strong Q3 2025 Results and Outlook

ConocoPhillips reported a robust third quarter in 2025, with earnings per share (EPS) of $1.61, beating analyst estimates of $1.41. The company's production exceeded guidance, and operating costs declined, contributing to its strong financial performance. The company's capital expenditures were $2.9 billion, down quarter-on-quarter, and it returned $2.2 billion to shareholders through buybacks and dividends.

Publication Date: Nov -07

                                    📋 Highlights
                                    Production Guidance Raised:
                                                Full-year production guidance increased to 2,375,000 barrels of oil equivalent per day.
Shareholder Returns:
                                                $2.2 billion returned in Q3 2025, including $1.3 billion in buybacks and $1 billion in dividends.
Willow Project Cost Escalation:
                                                Capital estimate for Alaska’s Willow project rose to $8.5–9 billion due to inflation and North Slope costs.
2026 Capital and Cost Reduction:
                                                Preliminary guidance of $12 billion capital spend and $10.2 billion operating costs, down from 2025 levels.
Free Cash Flow Target:
                                                Anticipates $7 billion free cash flow inflection by 2029, with $1 billion annual improvement from 2026–2028.

                                

Financial Performance

The company's financial performance was driven by its operational efficiency and cost management. ConocoPhillips' operating expenses improved by $400 million, and it expects to capture more cost reductions in 2026. The company's cash and short-term investments stood at $6.6 billion, and long-term liquid investments were $1.1 billion.

Production and Capital Guidance

ConocoPhillips raised its full-year production guidance to 2,375,000 barrels of oil equivalent per day and reduced its adjusted operating cost guidance. For 2026, the company expects to significantly reduce its capital spend and operating costs, with a preliminary guidance of $12 billion for capital expenditures and $10.2 billion for operating costs. The company anticipates flat to 2% underlying production growth in 2026.

Willow Project Update

The Willow project in Alaska has seen a capital estimate increase to $8.5 billion to $9 billion, primarily due to higher general inflation and localized North Slope cost escalation. Despite this, the project schedule remains on track, with first oil expected in early 2029. The company's executives expressed confidence in the project's competitiveness within its portfolio, citing attractive margins due to Alaska's 100% oil production selling at a premium to Brent.

Valuation and Outlook

ConocoPhillips' valuation metrics indicate a relatively attractive profile, with a P/E Ratio of 12.08, EV/EBITDA of 4.86, and a Dividend Yield of 3.64%. The company's ROE is 13.56%, and its ROIC is 7.53%. Analysts estimate next year's revenue growth at -3.3%. The company's strong project pipeline, improving costs, and focus on free cash flow growth position it for sector-leading free cash flow growth through the end of the decade.

3. NewsRoom

Evaluating ConocoPhillips (COP) Stock's Actual Performance

Dec -04

Source: fool.com

3 Oil Stocks to Watch as Storylines Simmer

Dec -01

Source: schaeffersresearch.com

20 Years on Wall Street Taught Me: 5 Large Cap High-Yield Dividend Giants You Never Sell

Dec -01

Source: 247wallst.com

Oil market facing persistent risks, Citi reckons it'll be tough for producers to 'outperform'

Dec -01

Source: proactiveinvestors.co.uk

Top Wall Street analysts recommend these dividend stocks for stable income

Nov -30

Source: cnbc.com

Rep. Lisa C. McClain Sells ConocoPhillips (NYSE:COP) Stock

Nov -27

Source: defenseworld.net

ConocoPhillips or ExxonMobil: Which Oil Major Looks Stronger Today?

Nov -26

Source: zacks.com

Bank Julius Baer & Co. Ltd Zurich Sells 114,720 Shares of ConocoPhillips $COP

Nov -25

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.18%)

6. Segments

Lower 48

Expected Growth: 4.5%

ConocoPhillips' Lower 48 segment growth is driven by increasing demand for oil and gas, improved operational efficiency, and strategic asset acquisitions.

Alaska

Expected Growth: 4.4%

ConocoPhillips' Alaska segment is expected to grow due to increasing demand for energy, ongoing exploration and production activities, and strategic investments in the region.

Europe, Middle East and North Africa

Expected Growth: 3.5%

ConocoPhillips' EMENA segment is driven by increasing energy demand, urbanization, and industrialization in the Middle East and North Africa, as well as a strong position in European markets.

Canada

Expected Growth: 2.5%

ConocoPhillips' Canadian segment is driven by increasing oil sands output, growth in liquids production, and ongoing cost savings initiatives.

Asia Pacific

Expected Growth: 5.3%

Growing demand for energy in Australia, China, and industrialization in Indonesia and Malaysia drive the Asia Pacific segment's growth, supported by ConocoPhillips' established operations and strategic partnerships.

Corporate and Other

Expected Growth: 5.5%

ConocoPhillips' Corporate and Other segment is expected to grow, driven by increasing focus on cost reduction and optimization of corporate functions, as well as potential growth from miscellaneous activities.

Intersegment Eliminations

Expected Growth: 5.5%

ConocoPhillips' intersegment eliminations growth driven by increasing refining and petrochemical margins, coupled with growing production volumes, and strategic asset optimization.

7. Detailed Products

Crude Oil

ConocoPhillips is a leading producer of crude oil, which is used as a raw material for refining into various petroleum products.

Natural Gas

ConocoPhillips is a significant producer of natural gas, a clean-burning fuel used for power generation, heating, and industrial applications.

Liquefied Natural Gas (LNG)

ConocoPhillips is a major producer of LNG, a cleaner-burning fuel used for power generation and industrial applications.

Refined Products

ConocoPhillips refines crude oil into various petroleum products, including gasoline, diesel, jet fuel, and lubricants.

Petrochemicals

ConocoPhillips produces petrochemicals, including ethylene, propylene, and butadiene, used in the production of plastics and other products.

Lubricants

ConocoPhillips produces a range of lubricants, including motor oils, transmission fluids, and industrial lubricants.

8. ConocoPhillips's Porter Forces

Forces Ranking

Threat Of Substitutes

ConocoPhillips faces moderate threat from substitutes due to the availability of alternative energy sources such as solar and wind power. However, the high demand for oil and gas products reduces the impact of substitutes.

Bargaining Power Of Customers

ConocoPhillips has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's large scale of operations and strong brand reputation further reduce customer bargaining power.

Bargaining Power Of Suppliers

ConocoPhillips relies on a large network of suppliers for its operations. While the company's scale and reputation give it some bargaining power, suppliers of critical components and services may still exert some influence.

Threat Of New Entrants

The oil and gas industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to challenge ConocoPhillips' market position.

Intensity Of Rivalry

The oil and gas industry is highly competitive, with several large players competing for market share. ConocoPhillips faces intense rivalry from companies such as ExxonMobil, Chevron, and BP.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	27.07%
Debt Cost	9.21%
Equity Weight	72.93%
Equity Cost	10.27%
WACC	9.98%
Leverage	37.12%

11. Quality Control: ConocoPhillips passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

EOG Resources

A-Score: 6.4/10

Value: 5.9

Growth: 5.7

Quality: 7.8

Yield: 8.0

Momentum: 2.5

Volatility: 8.3

1-Year Total Return ->

Diamondback Energy

A-Score: 6.2/10

Value: 7.4

Growth: 7.8

Quality: 6.3

Yield: 7.0

Momentum: 2.0

Volatility: 6.7

1-Year Total Return ->

Devon Energy

A-Score: 6.0/10

Value: 8.1

Growth: 5.2

Quality: 5.9

Yield: 8.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

Hess

A-Score: 5.7/10

Value: 3.6

Growth: 7.1

Quality: 6.6

Yield: 2.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

ConocoPhillips

A-Score: 5.6/10

Value: 6.0

Growth: 5.1

Quality: 6.5

Yield: 6.0

Momentum: 2.5

Volatility: 7.7

1-Year Total Return ->

Oxy

A-Score: 5.0/10

Value: 6.9

Growth: 5.2

Quality: 5.1

Yield: 3.0

Momentum: 3.0

Volatility: 7.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.32%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.98%

ConocoPhillips - US20825C1045

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on COP

1.c. Company Highlights

Less Volatile

Average Quality

Fairly Valued

Revenues Miss

Better Quality

Earnings Beats

Average Growth

Revenues Beats

Stable Momentum

Weak Momentum

Medium Volatility

Average Yield

2. ConocoPhillips' Strong Q3 2025 Results and Outlook

Financial Performance

Production and Capital Guidance

Willow Project Update

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.18%)

6. Segments

Lower 48

Expected Growth: 4.5%

Alaska

Expected Growth: 4.4%

Europe, Middle East and North Africa

Expected Growth: 3.5%

Canada

Expected Growth: 2.5%

Asia Pacific

Expected Growth: 5.3%

Corporate and Other

Expected Growth: 5.5%

Intersegment Eliminations

Expected Growth: 5.5%

7. Detailed Products

Crude Oil

Natural Gas

Liquefied Natural Gas (LNG)

Refined Products

Petrochemicals

Lubricants

8. ConocoPhillips's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: ConocoPhillips passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

93.69$

12.e Scoring ^Insights

12.f DCF ^BETA