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ConocoPhillips stock forecast: Will COP keep rising?

By Rob Griffin

Edited by Alexandra Pankratyeva

12:03, 22 March 2022

Houston, Texas, USA - September 22, 2018: Sign of ConocoPhillips at Company headquarters in Houston, US. ConocoPhillips is an American multinational energy corporation.
ConocoPhillips stock forecast: Will COP keep rising? – Photo: Shutterstock

ConocoPhillips (COP), the US independent exploration and production company, has been a major beneficiary of the global recovery from Covid-19. The Houston, Texas-based company’s stock price has risen 241% from $29.25 in March 2020 to $99.60 as the market closed on 18 March 2022.

But will the stock keep rising or has it reached a ceiling? In this ConocoPhillips share price forecast we take an in-depth look at its future prospects.

ConocoPhillips stock analysis: Growing energy demand boosting COP price

ConocoPhillips explores for, produces, transports and markets crude oil, bitumen, natural gas, natural gas liquids and liquefied natural gas on a worldwide basis. It has operations in 15 countries. 

It is currently the sixth largest oil and gas company with a market cap of $129.43bn (£98.18bn), according to CompaniesMarketCap, and the seventh largest energy company (as of 21 March 2022).

Shareholders in ConocoPhillips have had a strong couple of years as they’ve ridden the wave of growing global energy demand as normality has returned after the Covid-19 lockdowns.

According to ConocoPhillips historical stock price, the stock is 89% up over the past year and gained 35% from $73.77 at the start of January to $99.60 as the market closed on 18 March 2022.

According to Allen Good, sector analyst at Morningstar, the company has made the most of the increasing demand for energy.

“ConocoPhillips ended the year on a high note as it continued to benefit from higher oil and gas prices and greater volumes during the fourth quarter,” he said.

ConocoPhillips (COP) historical stock performance

COP stock news: Response to Russia’s invasion of Ukraine

ConocoPhillips is donating $2m for humanitarian assistance to those directly impacted by the war – and “doubling the match of personal donations” to relief organisations by eligible US employees.

CEO and chair Ryan Lance commented: “We are deeply troubled and saddened by the escalating humanitarian crisis resulting from the war in Ukraine.”

Although ConocoPhillips doesn’t have operations – nor own assets – in either Russia or Ukraine, it is keen for a peaceful solution. “We join with the international community in supporting the humanitarian organisations tirelessly working to help those directly impacted,” Lance added.

The already bullish ConocoPhillips stock market performance was boosted by the Russia-Ukraine military conflict and subsequent spike in oil and gas prices. 

“To date, there have been no disruptions to the flow of Russian oil as we expected. Nonetheless, prices have risen as non-energy sanctions have made it more difficult for Western customers to transact for Russian oil,” said David Meats, Morningstar director of equity research for energy and utilities.
Lauren Solberg and Jakir Hossain from Morningstar added: “The energy sector has been the top performer in the market since Feb. 23, continuing the strong run it had in 2021.”

The analysts particularly mentioned strong gains of ExxonMobil (XOM), Chevron (CVX), and Occidental Petroleum (OXY). However, the ConocoPhillips stock value could add to the list, trading at its all-time high above $102 at the time of writing (21 March). 

ConocoPhillips (COP) vs ExxonMobil (XOM) vs Chevron (CVX) vs Occidental Petroleum (OXY) five-year performance

ConocoPhillips fundamental analysis: Latest earnings

The company reported fourth-quarter 2021 earnings of $2.6bn, or $1.98 per share, compared with a loss of $0.8bn, or ($0.72) per share, in the corresponding period in 2020.

Full-year 2021 earnings were $8.1bn, or $6.07 per share, compared with a loss of $2.7bn, or ($2.51) per share, for full-year 2020.

ConocoPhillips also announced a $1bn increase in expected 2022 return of capital to shareholders to a new total of $8bn, an increase of more than 30% over 2021. 

It declared both an ordinary dividend of 46 cents per share and a second-quarter variable return of cash (VROC) payment of 30 cents per share, a 50% increase over the first-quarter VROC. 

Combined, the targeted 2022 ordinary dividend and VROC represent a more than 50% increase in cash return to shareholders compared to 2021.

Capped a “transformative year”

In a statement, Ryan Lance declared that the strong fourth-quarter results “capped a transformative year” for the company. “During 2021, we strengthened our outstanding low cost of supply portfolio,” he said.

Lance highlighted the closure and successful integration of the Concho acquisition, as well as the acquisition and start of the integration of the accretive Shell Permian position into the portfolio.

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Looking ahead, he pledged to continue advancing the company’s commitment to ESG excellence, announcing plans to further reduce both net and gross emissions intensity by 2030. 

ConocoPhillips (COP) stock forecast: Analyst sentiment

According to Danni Hewson, financial analyst at AJ Bell, US energy giants such as ConocoPhillips have found themselves in a sweet spot. 

“Not only has the price of oil and gas shot up, which is guaranteed to make their next set of figures look positively sparkly, they’re also enviably positioned to take advantage of the sanctions imposed or implied on Russian energy supplies,” she told Capital.com.

Hewson pointed out there had been rumblings about the US needing to up its oil output since early last year as global economies awoke from their pandemic slumber with a raging appetite for growth.

“The US consumer isn’t used to the kind of prices they’re being asked to pay at the pump and they’re demanding good old American corporations step up to the plate,” she said. “ConocoPhillips has already made it clear it’s working on it, and why not when there is such a prize to be had?” Hewson added.

Investors clearly agree as the COP share price has shot up by 50% compared to where it was at the start of 2020, noted Hewson, but is it responsible in the longer term to put extra cash into hydrocarbon exploration? 

“It’s a difficult circle to square but the last few months have sparked some difficult conversations,” she added. “Change is coming but it’s not here yet and the transition might be more uncomfortable than many of us had thought.”

Allen Good believes that ConocoPhillips is “an attractive way” to play higher oil prices. 

“Management has committed to a 10-year plan that focuses on capital discipline and growing shareholder returns with higher oil prices,” he wrote in a note. “Although it has been acquisitive (Concho, Shell) it has paid fair prices that should create value,” Good said.

Good pointed out that the combination of a strong portfolio and a focused, disciplined management team made the company “an attractive option in the energy sector”. 

Phil Gresh, an analyst at JP Morgan, sees COP’s combination of modest organic growth, solid balance sheet and competitive return of capital as attractive. 

However, he believes the valuation largely seems reflective, with the stock trading in between majors and E&Ps. As a result, he remains neutral on the stock.

“COP continues to be a leader in the E&P sector around disciplined capital allocation,” he said. “With the CXO acquisition closed in early 2021 and Shell Permian deal closed on 12/1, COP has enhanced its Permian footprint, providing the company with additional growth optionality longer term.”

Gresh believes COP should be able to return solid free cash flow to shareholders in the form of dividends/buybacks, given its still strong balance sheet. 

“From a valuation perspective, we think most of this upside potential is currently reflected in the stock price relative to our coverage group,” he added. 

His COP stock price target for December 2022 is up from $90 a share to $94 a share. 

ConocoPhillips stock forecast: Targets for 2022, 2025 and 2027 

How high can ConocoPhillips stock go or will the positive trend reverse? The company is a “not-so-good long-term (one year) investment”, according to the algorithmic ConocoPhillips stock price prediction of Wallet Investor, which suggested the stock could trade at $104.64 over the next 12 months.

The site estimated the COP’s average price to reach $106.56 by the end of 2022. The ConocoPhillips stock forecast 2025 had the price edging up to $112.28 by the end of the year, while the five-year forecast to March 2027 had it stalled at $112.75. As of 21 March 2022, the service did not provide longer term price targets for 2030.

So, is ConocoPhillips stock a ‘buy’, ‘sell’ or ‘hold’? According to the consensus view of 20 analysts compiled by MarketBeat (as of 21 March), it was a ‘buy’ – even though its price was expected to fall.

Fifteen analysts saw it as a ‘buy’, one had it down as a ‘strong buy’, while the remaining four were recommending it as a ‘hold’. 

However, the consensus view was that the stock could slip to $97.65 over the next year. The most optimistic predicted it could reach $135, while the pessimists warned it could tumble 50% to $50.

ConocoPhillips (COP) analyst ratings and price targets

When looking for ConocoPhillips (COP) stock predictions, it’s important to bear in mind that analysts’ forecasts and algorithm-based price targets can be wrong. Projections are based on making fundamental and technical studies of the COP stock historical price pattern – but past performance does not guarantee future results.

It is important to do your own research and always remember your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. You should never trade money that you cannot afford to lose.

FAQs

Is ConocoPhillips stock a good buy?

Whether COP is a suitable asset depends on your own trading objectives – and the opinion based on your own research. Remember, it’s important to reach your own conclusion of the company’s prospects and likelihood of achieving analysts’ targets.

Will ConocoPhillips stock go up or down?

Nobody knows for sure. The consensus view of Wall Street analysts as of 21 March was that the price could slip to $97.65 over the next year. However, an algorithmic ConocoPhillips stock forecast from Wallet Investor suggested it could rise to $112.75 over the next five years.

Why has the ConocoPhillips stock been going up?

Rising oil prices have helped boost the stock price over the past couple of years. This has been particularly the case since the world started to return to normal after the widespread Covid-19 lockdowns hit demand.

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CVX
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159.23 USD
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CVX
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COP
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114.42 USD
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COP
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