ConocoPhillips (COP): Evaluating Valuation After Recent Share Price Pullback

ConocoPhillips (COP) shares have pulled back over the past month, leaving some investors wondering about the outlook as energy sector sentiment shifts. The company’s stock is currently trading near $86.

See our latest analysis for ConocoPhillips.

ConocoPhillips has seen its share price lose momentum lately, notching a 1-month share price return of -5.99% and dipping further year-to-date. While recent headlines have been sparse, the stock’s longer view tells a more encouraging story. The five-year total shareholder return is 239% despite near-term volatility.

If you’re weighing your next move, now is a perfect time to broaden your search and discover fast growing stocks with high insider ownership

With shares lagging and fundamentals still strong, is ConocoPhillips currently trading at an attractive discount? Or is the market already accounting for its future growth prospects, leaving little upside for investors?

Most Popular Narrative: 25% Undervalued

At last close of $86.41, the most widely followed narrative places ConocoPhillips’ fair value much higher, shining a spotlight on a sizeable perceived discount. This sets up a valuation debate driven by long-term energy demand and is distinct from recent share price moves.

The company's expanding LNG portfolio and progress on large-scale liquefaction projects (notably in Qatar, Port Arthur, and Willow) are set to capture significant market share from robust global gas demand, especially as natural gas solidifies its role as a "transition fuel." These projects are expected to drive a substantial free cash flow inflection and topline revenue expansion through 2029.

Read the complete narrative.

What’s fueling this high conviction valuation? The narrative leans heavily on game-changing future projects and ambitious jumps in both revenue and margins. The formula for outperformance is hidden within bold financial projections, with new capacity, cost wins, and much fatter profits all in play. Find out what numbers the narrative is really banking on to get to this price target.

Result: Fair Value of $115.46 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution setbacks in major projects or unexpected drops in oil and gas prices could quickly undermine this positive valuation narrative.

Find out about the key risks to this ConocoPhillips narrative.

Build Your Own ConocoPhillips Narrative

Don’t just take these projections at face value. If you’d rather dig into the data and draw your own conclusions, you can shape your perspective in just a few minutes. Do it your way

A great starting point for your ConocoPhillips research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

The market is full of unique opportunities. Give yourself an edge by actively searching out stocks with the greatest potential instead of waiting for news headlines.

• Unlock reliable income potential and secure your future by checking out these 17 dividend stocks with yields > 3%, which offers attractive yields above 3%.
• Capitalize on the rapid advances in artificial intelligence by reviewing these 25 AI penny stocks, fueling tomorrow’s breakthroughs.
• Spot undervalued opportunities others might miss by starting with these 879 undervalued stocks based on cash flows, based on solid cash flow fundamentals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com