Market Inference Overview -- COP Stock

ConocoPhillips logged a 0.2% change during today's morning session, and is now trading at a price of $116.67 per share.

ConocoPhillips returned gains of 20.0% last year, with its stock price reaching a high of $138.49 and a low of $91.53. Over the same period, the stock outperformed the S&P 500 index by 12.0%. More recently, the company's 50-day average price was $107.23. ConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids in the United States and internationally. Based in Houston, TX, the large-cap Energy company has 9,700 full time employees. ConocoPhillips has offered a 4.6% dividend yield over the last 12 months.

Growing Revenues With Increasing Reinvestment in the Business:

2020-02-18 2021-02-16 2022-02-17 2023-02-16
Revenue (MM) $34,704 $18,707 $47,863 $81,079
Gross Margins 65.9% 56.8% 62.1% 58.1%
Operating Margins 25.6% -11.4% 29.0% 34.3%
Net Margins 20.72% -14.44% 16.88% 23.04%
Net Income (MM) $7,189 -$2,701 $8,079 $18,680
Net Interest Expense (MM) -$778 -$806 -$884 -$805
Depreciation & Amort. (MM) -$6,090 -$5,521 -$7,208 -$7,504
Earnings Per Share $6.4 -$2.51 $6.08 $12.56
EPS Growth n/a -139.22% 342.23% 106.58%
Diluted Shares (MM) 1,124 1,077 1,328 1,210
Free Cash Flow (MM) $14,728 $8,200 $20,667 $35,002
Capital Expenditures (MM) -$3,624 -$3,398 -$3,671 -$6,688
Net Current Assets (MM) -$18,551 -$20,703 -$29,205 -$27,077
Current Ratio 2.4 2.25 1.34 1.46
Long Term Debt (MM) $14,790 $14,750 $18,734 $16,226
Net Debt / EBITDA 0.83 3.01 1.29 0.58

ConocoPhillips benefits from growing revenues and increasing reinvestment in the business, low leverage, and wider gross margins than its peer group. The company's financial statements show a strong EPS growth trend and generally positive cash flows. Furthermore, ConocoPhillips has average net margins with a positive growth rate and just enough current assets to cover current liabilities.

ConocoPhillips's Valuation Is in Line With Its Sector Averages:

ConocoPhillips has a trailing twelve month P/E ratio of 8.5, compared to an average of 7.54 for the Energy sector. Based on its EPS guidance of $10.0, the company has a forward P/E ratio of 10.7. The 9.3% compound average growth rate of ConocoPhillips's historical and projected earnings per share yields a PEG ratio of 0.91. This suggests that its shares are undervalued. In contrast, ConocoPhillips is likely overvalued compared to the book value of its equity, since its P/B ratio of 2.94 is higher than the sector average of 1.68. The company's shares are currently trading 64.5% above their Graham number. In conclusion, ConocoPhillips's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.

ConocoPhillips Has an Average Rating of Buy:

The 24 analysts following ConocoPhillips have set target prices ranging from $94.0 to $153.0 per share, for an average of $129.41 with a buy rating. As of April 2023, the company is trading -17.1% away from its average target price, indicating that there is an analyst consensus of some upside potential.

ConocoPhillips has a very low short interest because 0.8% of the company's shares are sold short. Institutions own 81.6% of the company's shares, and the insider ownership rate stands at 0.15%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $13,075,969,983.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.