ConocoPhillips is set to release its fiscal second-quarter results on August 1, with expectations of both revenue and earnings surpassing market predictions. Despite COP stock being down 6% year-to-date, the company has raised its production guidance for Q2, projecting between 1.91 million and 1.95 million barrels of oil equivalent per day. Investors are advised to monitor these projections closely as well as the company’s efforts to meet its sustainability commitments.
COP stock has seen significant gains in recent years, with a 175% increase from early 2021 to around $110 currently. However, the stock’s performance has been inconsistent, with returns of 80% in 2021, 63% in 2022, and -2% in 2023. In comparison to the S&P 500, COP underperformed in 2023, highlighting the challenges of consistently beating the market index. Given the current macroeconomic environment, investors are curious to see if COP will see a strong jump or face underperformance in the coming months.
According to forecasts, ConocoPhillips’ valuation is estimated to be around $129 per share, which is 18% higher than the current market price. Revenue expectations for Q2 stand at approximately $15.3 billion, slightly above the consensus estimate, with total company production for the quarter increasing by 6% year-over-year. Lower 48 production, which includes U.S. shale basins and Gulf of Mexico production, played a significant role in the company’s output, with the Permian Basin contributing the most.
Earnings per share for COP in Q2 are forecasted to be $2.02, slightly exceeding consensus estimates. The company’s Q1 net income was down 13% year-over-year to $2.6 billion, with the average realized price falling by 7% to $56.60 per barrel of oil equivalent. Lower natural gas prices in the lower 48 states significantly impacted COP’s earnings, as nearly half of the company’s production volumes are natural gas or natural gas liquids. Despite these challenges, COP is expected to perform well in Q2, beating consensus estimates.
With an EPS estimate of $8.70 and a projected price-to-earnings multiple of 14.8x in fiscal 2024, COP’s price is forecasted to reach nearly $129, representing an 18% increase from the current market price. Comparisons with peers in the industry show how COP stacks up against competitors on important metrics. Investors can also explore Trefis Market Beating Portfolios for more insights and investment opportunities.
