ConocoPhillips (NYSE: COP) has seen a 4% increase in its stock price since the beginning of this year, currently priced at around $121 per share. Despite this increase, the company is believed to be fairly priced at this point. In the recent first quarter, ConocoPhillips experienced lower natural gas prices and increased costs, offsetting higher oil production volumes. The company expects continued volatility in the second quarter from its operations in the Permian Basin due to pipeline maintenance and third-party offtake constraints. As a result, ConocoPhillips raised production guidance for Q2 to 1.91 million to 1.95 million barrels of oil equivalent per day. It is essential for investors to monitor how these projections play out and ensure the company meets its sustainability commitments through cost discipline, innovation, and strategic acquisitions.
ConocoPhillips stock has shown strong gains of 200% from $40 in early January 2021 to around $121 currently, outperforming the S&P 500 over a three-year period. However, the stock’s performance has not been consistent, with returns of 80% in 2021, 63% in 2022, and -2% in 2023. In comparison, the S&P 500 had returns of 27% in 2021, -19% in 2022, and 24% in 2023, indicating that ConocoPhillips underperformed in 2023. In a challenging macroeconomic environment with high oil prices and elevated interest rates, it remains to be seen if Cop will continue to outperform the market or face underperformance in the coming months.
In the first quarter of this year, ConocoPhillips reported total revenue of $14.5 billion, down from $15.5 billion in the same quarter last year. Net income also decreased by 13% year-over-year to $2.6 billion, or $2.16 per share, as the company’s average realized price dropped by 7% to $56.60 per barrel of oil equivalent. This decrease was primarily due to a 46% decline in realized natural gas prices in the lower 48 states. Despite these challenges, total company production increased by 6% year-over-year to 1.9 million barrels of oil equivalent per day, with a significant portion of production coming from the Permian Basin.
Looking ahead, ConocoPhillips is forecasted to have revenues of $60.8 billion for the fiscal year 2024, representing a 4% increase year-over-year. The company’s earnings per share is expected to be $8.70. Based on these projections, ConocoPhillips’ valuation has been revised to $129 per share, reflecting an almost 7% increase from the current market price. It is also important to compare how ConocoPhillips stacks up against its peers in the industry to gain a better understanding of its performance and potential for growth in the future.
Investors can consider investing in ConocoPhillips through the Trefis Market Beating Portfolios, which have consistently outperformed the S&P 500 over recent years. As with any investment, it is essential to closely monitor the company’s performance, sustainability commitments, and market dynamics to make informed decisions. With the current challenges in the macroeconomic environment and the volatile nature of the energy sector, staying informed and proactive is key to successful investing in companies like ConocoPhillips.
