ConocoPhillips (COP): Evaluating Valuation After Streamlining Moves and LNG Growth Plans

ConocoPhillips, a leading U.S. energy producer, is in the spotlight after announcing workforce reductions and outlining ambitious plans to boost cash flow by 2029. These actions reflect the company's focus on streamlining operations and creating value for shareholders.

See our latest analysis for ConocoPhillips.

ConocoPhillips has seen some ups and downs in the past year, with a recent round of restructuring and sizable growth plans driving attention. While the company’s share price has slipped nearly 12% year to date and total shareholder return stands at about -17% over the last twelve months, its focus on free cash flow and shareholder returns is setting the stage for longer-term momentum.

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With shares trading at a discount to analyst targets and sizable growth projects on the horizon, investors are left to wonder if ConocoPhillips is undervalued or if the market has already priced in its future gains.

Most Popular Narrative: 22.5% Undervalued

ConocoPhillips's most widely followed narrative sets a fair value far above its recent closing price, signaling a bullish outlook that stands in contrast to current market levels. This gap hints at the potential for significant upside, provided the company's ambitious growth and cash flow plans materialize.

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 if the real value is hidden in the numbers behind long-range revenue, margin, and share scaling targets? Discover which future financial leaps and consensus expectations drive this bold estimate. Dive in to unpack the key levers fueling that target price.

Result: Fair Value of $113.78 (UNDERVALUED)

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

However, execution missteps in major projects or prolonged weakness in global oil prices could quickly undermine the company’s long-term growth outlook.

Find out about the key risks to this ConocoPhillips narrative.

Another View: Looking Beyond Analyst Targets

While analyst consensus sets ConocoPhillips's fair value well above the current share price, our SWS DCF model paints an even more optimistic picture. It suggests the stock is trading at a substantial 53.5% discount to its fair value, implying much more upside than analyst projections. But is this deep discount too good to be true, or does it point to an opportunity investors are missing?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own ConocoPhillips Narrative

If you want to dig into the data and draw your own conclusions, you can craft a personalized outlook in just a few minutes with Do it your way.

A great starting point for your ConocoPhillips research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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