Conocophillips (COP) AI Stock Analysis

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Conocophillips

(NYSE:COP)

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Outperform 77 (OpenAI - 5.2)

Rating:77Outperform

Price Target:

$119.00

▲(7.67% Upside)

The score is driven primarily by solid financial performance (strong cash generation and moderate leverage) and a constructive technical setup (price above key moving averages with positive MACD). Earnings-call guidance further supports the outlook via lower 2026 capex/opex and a clear multi-year free-cash-flow improvement plan, while valuation appears reasonable with a ~3% dividend yield but not obviously cheap. Key offsetting risk remains commodity-driven cyclicality and sensitivity to oil/gas prices.

Positive Factors

Cash generation

Sustained high operating cash flow across 2021–2024 and meaningful free cash flow in most years provide durable funding for capital projects, dividends, and buybacks. This recurring cash generation gives management flexibility to invest, de-lever, and sustain shareholder returns through cycles.

Balance sheet & liquidity

Moderate sector-appropriate leverage combined with high cash and liquid investments strengthens financial resilience. This balance-sheet flexibility supports multi-year project funding, opportunistic M&A or buybacks, and buffers commodity-driven downturns without forcing distress asset sales or drastic capex cuts.

Project pipeline & efficiency gains

Well-advanced major projects and rising LNG offtake plus measurable D&C efficiency gains create a lasting improvement to supply economics. Incremental FCF from projects (management targets ~$7B by 2029) and lower cost-of-supply sustain margins and support long-term cash generation as projects ramp.

Negative Factors

Commodity cyclicality & breakeven

A relatively high breakeven tied to commodity prices means prolonged weak oil or gas markets can materially compress free cash flow and constrain capital returns. This structural price sensitivity increases volatility of funding for projects and shareholder distributions across multi-year downturns.

Reserve replacement & pre-productive spend

Single-year reserve replacement below 100% raises the importance of ongoing project execution to sustain production. Heavy pre-productive capital outlays delay returns on investment, raise near-term breakeven and extend the timeline before new wells meaningfully bolster long-term production and cash flow.

Geopolitical & divestiture execution risk

Unresolved Venezuela receivables and legal/licensing hurdles, plus incomplete asset sales, create structural uncertainty over recoverable value and the timing of proceeds. This constrains capital redeployment and leaves open downside from protracted legal or political timelines.

Conocophillips (COP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$134.42B

Dividend Yield3.43%

Average Volume (3M)8.83M

Price to Earnings (P/E)17.1

Beta (1Y)0.62

Revenue Growth8.41%

EPS Growth-16.12%

CountryUS

Employees11,800

SectorEnergy

Sector Strength52

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)1.02

Shares Outstanding1,235,718,300

10 Day Avg. Volume8,435,456

30 Day Avg. Volume8,827,776

Financial Highlights & Ratios

PEG Ratio-0.75

Price to Book (P/B)1.74

Price to Sales (P/S)1.88

P/FCF Ratio6.68

Enterprise Value/Market Cap1.14

Enterprise Value/Revenue2.57

Enterprise Value/Gross Profit7.32

Enterprise Value/Ebitda6.13

Forecast

1Y Price Target

$115.67

Price Target Upside4.66% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering19

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Conocophillips Business Overview & Revenue Model

Company DescriptionConocoPhillips explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids worldwide. It primarily engages in the conventional and tight oil reservoirs, shale gas, heavy oil, LNG, oil sands, and other production operations. The company's portfolio includes unconventional plays in North America; conventional assets in North America, Europe, Asia, and Australia; various LNG developments; oil sands assets in Canada; and an inventory of conventional and unconventional exploration prospects. ConocoPhillips was founded in 1917 and is headquartered in Houston, Texas.

How the Company Makes MoneyConocoPhillips generates revenue primarily through the exploration, production, and sale of crude oil, natural gas, and natural gas liquids (NGLs). Its revenue model is heavily reliant on the global prices of oil and natural gas, thereby making it sensitive to fluctuations in commodity prices. The company also earns income from its midstream operations, which involve the transportation and processing of hydrocarbons. Additionally, ConocoPhillips engages in joint ventures and partnerships with other energy companies to enhance its resource development and operational efficiencies, further contributing to its revenue streams. The company strategically manages its portfolio of assets to optimize production and reduce costs, which is crucial for maintaining profitability in a competitive market.

Conocophillips Key Performance Indicators (KPIs)

Any

Revenue by Geography

Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.

Chart InsightsConocoPhillips' revenue from the Lower 48 region remains robust, driven by exceeding production guidance and strategic asset dispositions. Despite selling Anadarko Basin assets, the company maintains strong production levels, particularly in the Lower 48, contributing to stable revenue. The integration of Marathon Oil assets has bolstered synergies, enhancing cost efficiency and margin improvements. However, challenges such as working capital headwinds and oil market volatility could impact future revenue stability. The company’s strategic focus on cost reductions and asset sales aims to mitigate these risks and support long-term free cash flow growth.

Data provided by:

The Fly

Conocophillips Earnings Call Summary

Earnings Call Date:Feb 05, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:Apr 30, 2026

Earnings Call Sentiment Positive

The call emphasized numerous operational and financial accomplishments — production growth, strong Q4 CFO, disciplined capital allocation, successful Marathon integration, robust liquidity and balance sheet improvements, multi-year reserve replacement, substantial progress on LNG and Willow projects, and clear 2026 cost and capital efficiency targets. The lowlights were largely manageable: single-year reserve replacement slightly below 100%, remaining pre-productive capital keeping breakeven elevated until projects ramp, an unresolved Venezuela recovery process, an incomplete divestiture target, one rig incident (no injuries), and ongoing commodity-price sensitivities. Overall, positive operational momentum and financial position materially outweigh the manageable risks and near-term headwinds.

Q4-2025 Updates

Positive Updates

Full-Year Production Growth and Q4 Delivery

Pro forma production grew 2.5% in 2025. Q4 production was 2,320,000 barrels of oil equivalent per day, consistent with the midpoint of guidance; 2026 production guidance set at 2,330,000–2,260,000 boe/d (modest growth).

Strong Q4 and FY Financials

Q4 adjusted earnings of $1.02 per share and fourth-quarter cash from operations (CFO) of $4.3 billion. Full-year capital expenditures totaled $12.6 billion.

Sector-Leading Return of Capital

Returned $2.1 billion in Q4 (just over $1 billion buybacks and ~$1 billion ordinary dividends). Full-year return of capital was $9 billion, equal to 45% of CFO, meeting the company's objective.

Balance Sheet and Liquidity Strength

Cash and short-term investments totaled $7.4 billion with an additional $1.1 billion in long-term liquid investments. Cash balances rose ~$1 billion year-over-year and the company paid down $900 million of debt in 2025, resulting in net debt reductions of nearly $2 billion.

Marathon Integration Outperformance

Successfully integrated Marathon Oil assets, outperforming the acquisition case on key metrics: captured doubled synergies, realized an additional ~$1 billion of one-time benefits, eliminated the Marathon Capital program, and sustained pro forma production growth.

Portfolio and Reserve Replacement

Organic reserve replacement for 2025 was just under 100%; trailing three-year organic reserve replacement was 106% and five-year was 133%. Excluding price revisions, organic replacement was ~110%, supporting the company’s resource-to-reserve conversion thesis.

LNG and Major Project Progress

Offtake portfolio grew to ~10 million tonnes per annum. Major LNG projects reported >80% completion for key projects (NFE noted to start in H2), and Willow nearing ~50% complete; management expects ~$1 billion incremental free cash flow (FCF) per year from 2026–2028 and an additional ~$4 billion from Willow in 2029, contributing to a $7 billion FCF inflection by 2029.

2026 Cost and Capital Efficiency Targets

2026 guidance targets ~$12 billion CapEx (down ~$600 million YoY, ≈4.8% decrease from $12.6B) and ~$10.2 billion operating costs (down ~$400 million YoY, ≈3.8%), aiming for a combined ~$1 billion reduction in CapEx and OpEx versus 2025.

Lower 48 Productivity and Capital Efficiency Gains

Drilling and completion efficiencies improved by more than 15% in 2025. Delaware oil productivity per foot rose ~8% YoY while average lateral length increased ~9% YoY; Eagle Ford oil productivity per foot rose ~7% YoY. Permian long-lateral inventory: ~80% of future wells ≥2 miles (up from 60% in 2023) and 2026 program ~90% ≥2 miles, driving substantial cost-of-supply reductions (1→2 mile ~25% improvement; 3–4 miles adds another 10–15%).

Progress on Divestitures and Asset Monetization

Closed over $3 billion of asset sales in 2025, including $1.6 billion in Q4, progressing against an upsized $5 billion divestiture target.

Operational Wins: Canada and Alaska

Surmont pad 104 WA delivered ahead of schedule with first oil roughly one month early; steady pad cadence (new pad expected every 12–18 months). Alaska exploration campaign commenced early with first of four wells spud, targeting tieback resources to Willow and existing infrastructure.

Negative Updates

Reserve Replacement Slightly Below 100% in 2025

Organic reserve replacement for 2025 came in just under 100% (though multi-year metrics remain strong); price-related revisions reduced the single-year metric below 100%.

Pre-productive Capital and Current Breakeven Vulnerability

Management stated pre-dividend free cash flow breakeven currently in the mid-$40s per barrel WTI; dividend adds roughly $10/barrel to that number. Pre-productive capital (roughly ~$6B referenced) and remaining project spend keep near-term breakeven higher until projects come online.

Geopolitical and Legal Uncertainty in Venezuela

Recovery of amounts owed in Venezuela remains uncertain and contingent on improved security, fiscal conditions and durable policy — company is pursuing judgments but outcomes and timing remain unclear; Sitco sale process subject to appeals and license steps.

Divestiture Target Not Yet Fully Met

Closed >$3 billion of asset sales in 2025 vs an upsized $5 billion divestiture target, leaving further dispositions to complete the announced target.

Operational Incident — Rig D26

A rig (D26) incident occurred during the Alaska season; fortunately no injuries and the event has been backfilled with other rigs so exploration and Willow predrill schedules are not expected to be impacted, but it highlights operational risk exposure.

Commodity Price and Market Sensitivities

Management set 2026 plans conservatively given expected commodity softness; company has substantial natural gas exposure — ~$400 million sensitivity in cash flow per $1 change in Henry Hub (reflecting higher gas exposure versus early LNG volumes), and LNG margin sensitivity (~$200 million per $1 on first 5 Mt) — exposing outcomes to gas/LNG price movements.

Company Guidance

ConocoPhillips guided 2026 capex of about $12 billion (down ~$600M y/y) and operating costs of about $10.2 billion (down ~$400M), targeting a combined ~$1 billion reduction versus 2025, with full‑year production guided to 2.33–2.26 million boe/d (Q1 2.30–2.34 million boe/d including weather downtime). The company reiterated returning roughly 45% of CFO to shareholders (continuing buybacks and a base dividend growing at a top‑quartile S&P 500 rate), starting 1) a multiyear free‑cash‑flow improvement of about $1 billion per year in 2026–2028 and 2) a $7 billion FCF inflection by 2029 (including ~$4 billion from Willow), which management says should push FCF breakeven into the low‑$30s/boe WTI by decade end; additional metrics noted include ~10 mtpa LNG offtake, continued Lower‑48 D&C efficiency gains (2025 >15%), and a strong liquidity position (cash & ST investments $7.4B plus $1.1B long‑term liquid investments).

Conocophillips Financial Statement Overview

Summary

Strong cash generation (robust operating cash flow in 2021–2024 and generally positive free cash flow) and moderate leverage (debt-to-equity ~0.36–0.44 in 2021–2024) support a solid financial profile. The main constraint is clear commodity cyclicality: revenue and earnings stepped down from 2022 peaks with volatility implied in recent/forward annual data.

Income Statement

Positive

Profitability is strong in the up-cycle years, with healthy margins in 2021–2024 (gross margin ~29–38% and net margin ~17–24% where provided). However, results are clearly commodity-sensitive: 2020 showed losses, and revenue has been volatile with negative growth in 2023 and 2024, plus a large decline indicated for 2025. Net income also stepped down from 2022–2024, signaling a softer earnings backdrop versus peak levels.

Balance Sheet

Positive

Leverage looks reasonable for the sector, with debt-to-equity generally around ~0.36–0.44 (2021–2024) and equity building materially versus 2020, supporting balance-sheet resilience. Total debt is manageable relative to the company’s equity base, and returns on equity were strong in 2022–2024 (despite being negative in 2020). The main weakness is cyclical earnings risk: in down years, returns and balance-sheet flexibility can deteriorate quickly.

Cash Flow

Positive

Cash generation is a key strength: operating cash flow remained robust across 2021–2024 (~$17–20B) and free cash flow was meaningfully positive in most years, with a sharp improvement shown in 2025 versus 2024. Cash flow has also generally covered reported earnings well in the profitable years (operating cash flow exceeding net income in 2021–2024 where provided). The weakness is volatility—free cash flow dropped sharply from the 2022 peak and was near breakeven in 2020, reflecting sensitivity to the commodity cycle.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	59.67B	54.61B	56.14B	78.58B	46.06B
Gross Profit	20.98B	16.03B	18.20B	29.63B	14.73B
EBITDA	25.04B	24.43B	25.78B	37.13B	21.09B
Net Income	7.93B	9.22B	10.92B	18.62B	8.08B
Balance Sheet
Total Assets	121.94B	122.78B	95.92B	93.83B	90.66B
Cash, Cash Equivalents and Short-Term Investments	6.98B	6.11B	6.61B	9.24B	6.59B
Total Debt	23.44B	25.35B	19.63B	17.19B	19.93B
Total Liabilities	57.45B	57.98B	46.65B	45.83B	45.26B
Stockholders Equity	64.49B	64.80B	49.28B	48.00B	45.41B
Cash Flow
Free Cash Flow	16.77B	8.01B	8.72B	18.16B	11.67B
Operating Cash Flow	19.80B	20.12B	19.96B	28.31B	17.00B
Investing Cash Flow	-8.84B	-11.15B	-12.00B	-8.74B	-8.54B
Financing Cash Flow	-10.10B	-8.84B	-8.66B	-18.05B	-6.33B

Conocophillips Technical Analysis

Technical Analysis Sentiment

Positive

Last Price110.52

Price Trends

50DMA

98.57

Positive

100DMA

94.22

Positive

200DMA

93.05

Positive

Market Momentum

MACD

3.67

Negative

RSI

61.18

Neutral

STOCH

80.37

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COP, the sentiment is Positive. The current price of 110.52 is above the 20-day moving average (MA) of 104.00, above the 50-day MA of 98.57, and above the 200-day MA of 93.05, indicating a bullish trend. The MACD of 3.67 indicates Negative momentum. The RSI at 61.18 is Neutral, neither overbought nor oversold. The STOCH value of 80.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COP.

Conocophillips Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FANG	81 Outperform	$48.31B	11.72	10.92%	2.70%	60.29%	-17.62%
EOG	78 Outperform	$64.98B	11.92	18.48%	3.79%	-5.15%	-19.06%
COP	77 Outperform	$134.42B	17.13	12.32%	3.43%	8.41%	-16.12%
DVN	77 Outperform	$27.12B	10.56	17.60%	2.64%	11.14%	-21.32%
CVX	76 Outperform	$363.54B	27.23	7.26%	4.54%	-3.44%	-22.05%
OXY	72 Outperform	$45.26B	33.44	5.82%	2.39%	-2.48%	-65.26%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

* Energy Sector Average

Performance Comparison

COP

Conocophillips

110.52

11.90

12.06%

CVX

Chevron

183.87

31.92

21.01%

DVN

Devon Energy

44.44

6.94

18.49%

EOG

EOG Resources

122.27

-8.55

-6.54%

OXY

Occidental Petroleum

47.11

-3.86

-7.57%

FANG

Diamondback

174.01

16.39

10.40%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 06, 2026