ConocoPhillips (COP): Revisiting Valuation After Oil Price Surge on Russian Sanctions and Supply Disruptions

Shares of ConocoPhillips (COP) got a lift after new U.S. sanctions on Russian oil and supply disruptions at Lukoil’s West Qurna-2 field sent oil prices higher. This latest rally has drawn the attention of investors who are watching global energy trends.

See our latest analysis for ConocoPhillips.

ConocoPhillips has seen its share price rally after the latest wave of supply concerns in global oil markets, but momentum is still a mixed bag. The stock has climbed 5.2% over the past week as oil prices rose, yet its total shareholder return is down more than 16% over the past year, reminding investors that last week’s surge comes after a period of cooling off. Longer-term holders are still well ahead, though, with a five-year total return topping 170% as energy markets have gradually rebounded.

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With oil prices on the rise and ConocoPhillips posting improved guidance, investors are now left to weigh whether the recent rally signals genuine undervaluation or if the market is already factoring in the company’s brighter outlook.

Most Popular Narrative: 19.5% Undervalued

With ConocoPhillips recently closing at $91.37 and the most widely followed narrative putting fair value at $113.54, the setup points to notable upside. Investors are watching these numbers carefully as the stock pushes against its recent trading range.

“Accelerated portfolio high-grading, including $5 billion in planned asset sales and ongoing cost synergies from the Marathon Oil integration, optimizes the production mix and boosts average margins. This strengthens net margin and long-term earnings. Aggressive cost management and company-wide digitalization and process automation (enabled by a new ERP system and leveraging scale from M&A) are expected to yield over $2 billion in annualized cost and margin improvements by 2026, directly enhancing free cash flow and profitability.”

Read the complete narrative.

What’s propping up this valuation? The most widely followed narrative expects record cash flow and margin expansion, built on transformation moves, not wishful thinking. Curious which pipeline projects and portfolio streamlining efforts Wall Street thinks will unlock huge upside? Unpack the details that could reshape how investors see fair value for ConocoPhillips.

Result: Fair Value of $113.54 (UNDERVALUED)

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

However, execution delays or unexpected cost overruns on major projects could disrupt profit gains and challenge the optimistic outlook for ConocoPhillips.

Find out about the key risks to this ConocoPhillips narrative.

Build Your Own ConocoPhillips Narrative

If you see things differently or like to follow your own path, you can quickly put together your own view using our tools. This process often takes 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.

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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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