Predicting Future Trends for ConocoPhillips Shares
Predicting Future Trends for ConocoPhillips Shares
A major oil and gas producer, ConocoPhillips (NYSE: COP) has seen a 12% decline in stock value since the start of 2023, while the S&P 500 has climbed 27% during the same period. In contrast, fellow oil giant Exxon Mobil's stock (NYSE: XOM) has risen 14% this year. Other competitors have also experienced growth in stock value. Check out Chevron's Stock Up 10%, What's Next?
What's happening with ConocoPhillips stock?
The third quarter saw a decrease in natural gas prices and an increase in costs, offset by higher oil production volumes. ConocoPhillips anticipates continued volatility in Q4 due to pipeline maintenance and third-party offtake constraints in the Permian Basin. The company has raised its production guidance for Q4 to 1.99 to 2.03 million barrels of oil equivalent per day. Investors should keep an eye on how these projections unfold and monitor the company's efforts to meet its sustainability commitments. It's crucial for ConocoPhillips' success that the company maintains cost discipline, invests in innovation, and makes strategic acquisitions like the recent one with Marathon Oil.
ConocoPhillips has positioned itself for a strong 2025 thanks to its acquisition of Marathon Oil in late November, valued at $22.5 billion, including $5.4 billion in assumed debt. The deal adds over two billion barrels of high-quality, low-cost resources to ConocoPhillips' portfolio, with an estimated cost of supply under $30 per barrel. The acquisition is expected to be immediately accretive to earnings, free cash flow, and return of capital per share. Significant synergies, exceeding $1 billion over the next 12 months, are anticipated as a result of this acquisition.
In Q3, ConocoPhillips reported total revenue of $13.6 billion, down from the $14.9 billion in the same quarter the previous year. The third-quarter earnings were $2.1 billion, or $1.76 per share, compared with the prior year's earnings of $2.8 billion, or $2.32 per share. The decrease in earnings was primarily due to the impact of lower prices. The average realized price fell 10% year-over-year to $54.18 per barrel of oil equivalent (boe) in Q3, primarily due to a decrease in realized natural gas prices in the lower 48 states.
ConocoPhillips' earnings were impacted by a milder-than-expected winter, which led to reduced demand for heating fuel. Despite this, the company's total production for the quarter rose to 1.917 million barrels of oil equivalent per day, up 6% year-over-year. The Lower 48 production accounted for half of the company's total output, with 781 mboed coming from the Permian, 246 mboed from the Eagle Ford, and 107 mboed from the Bakken.
COP is one of the few stocks to have increased in value each of the last three years, but it has yet to consistently beat the market. Returns for the stock were 87% in 2021, 74% in 2022, and 2% in 2023. Despite this, the Trefis High Quality Portfolio, comprising a collection of 30 stable stocks, has outperformed the S&P 500 each year over the same period, with less volatility.
It's worth considering the Trefis High Quality Portfolios for potential upside with a smoother ride than an individual stock. Could COP face a similar situation as in 2023 and underperform the S&P over the next 12 months, or will it see a significant jump?
We forecast ConocoPhillips' Revenues to reach $59 billion for fiscal year 2024, up 1% year-over-year. Looking at the bottom line, we now forecast EPS to be $7.74. Based on these updated forecasts, we have revised ConocoPhillips' Valuation to around $115 per share, based on an expected EPS of $7.74 and a 14.8x P/E multiple for fiscal year 2024, representing about a 12% increase from the current market price (Dec 16).
It's useful to compare ConocoPhillips with its peers. Check out ConocoPhillips Peers for comparisons between COP and its competitors on important metrics. Additionally, stakeholders can find other useful industry comparisons at Peer Comparisons.
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Despite the 12% decline in ConocoPhillips' stock value since the start of 2023, the company reported a total revenue of $13.6 billion in Q3, a slight decrease from the previous year. The company's cop revenue, or total earnings, were impacted by lower prices and reduced demand for heating fuel, resulting in a decrease from the previous year's earnings.